10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
	FORM 10-K

(Mark one)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to     

Commission File Number: 001-39452

INHIBRX, INC.
(Exact name of registrant as specified in its charter)
Delaware		82-4257312
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
11025 N. Torrey Pines Road, Suite 200
La Jolla, California		92037
(Address of principal executive offices)		(Zip Code)
	(858) 795-4220
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001	INBX		The Nasdaq Global Market
Securities registered pursuant to Section 12(g) of the Act
		None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.                                 Yes  ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).                     Yes  ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.           ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.                                Yes  ☒    No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes  ☐ No ☒

As of June 30, 2021, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $764.3 million, based on the closing price of the registrant’s common stock on the Nasdaq Global Market of $27.52 per share.

As of February 21, 2022, the registrant had 39,025,644 shares of common stock outstanding.

Documents Incorporated By Reference

The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information required in Part III of this Annual Report on Form 10-K is incorporated from the Registrant’s Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.

INHIBRX, INC.
ANNUAL REPORT ON FORM 10-K
For the Year Ended December 31, 2021

	TABLE OF CONTENTS
		PAGE
Special Note Regarding Forward-Looking Statements		1
Part I.		3
Item 1.	Business	3
Item 1A.	Risk Factors	49
Item 1B.	Unresolved Staff Comments	96
Item 2.	Properties	96
Item 3.	Legal Proceedings	96
Item 4.	Mine Safety Disclosures	96
Part II.		97
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	97
Item 6.	Reserved	98
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	99
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	112
Item 8.	Financial Statements and Supplementary Data	113
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	149
Item 9A.	Controls and Procedures	150
Item 9B.	Other Information	154
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	154
Part III		155
Item 10.	Directors, Executive Officers and Corporate Governance	155
Item 11.	Executive Compensation	155
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	155
Item 13.	Certain Relationships and Related Transactions, and Director Independence	155
Item 14.	Principal Accountant Fees and Services	155
Part IV.		156
Item 15.	Exhibits and Financial Statement Schedules	156
Item 16.	Form 10-K Summary	160
Signatures		160

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, or this Annual Report of Inhibrx, Inc., or Inhibrx, or the Company (also referred to as “we,” “us,” and “our”) contains forward-looking statements that involve risks and uncertainties. Except as otherwise indicated by the context, references in this Annual Report to “we,” “us” and “our” are to the consolidated business of the Company. All statements other than statements of historical facts contained in this Annual Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “design,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•the initiation, timing, progress and results of our research and development programs as well as our preclinical studies and clinical trials;

•our ability to advance therapeutic candidates into, and successfully complete, clinical trials;

•our interpretation of initial, interim or preliminary data from our clinical trials, including interpretations regarding disease control and disease response;

•the timing or likelihood of regulatory filings and approvals;

•the commercialization of our therapeutic candidates, if approved;

•the pricing, coverage and reimbursement of our therapeutic candidates, if approved;

•our ability to utilize our technology platform to generate and advance additional therapeutic candidates;

•the implementation of our business model and strategic plans for our business and therapeutic candidates;

•our ability to successfully manufacture our therapeutic candidates for clinical trials and commercial use, if approved;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates;

•our ability to enter into strategic partnerships and the potential benefits of such partnerships;

•our estimates regarding expenses, capital requirements and needs for additional financing;

•our financial performance;

•our expectations regarding the impact of the COVID-19 pandemic on our business;

•our and our third party partners and service providers’ ability to continue operations and advance our therapeutic candidates through clinical trials and the ability of our third party manufacturers to provide the required raw materials, antibodies and other biologics for our preclinical research and clinical trials in light of the COVID-19 pandemic and the ongoing political unrest in Hong Kong;

•our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; and

•developments relating to our competitors and our industry.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” elsewhere in this Annual Report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Annual Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Annual Report to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this Annual Report and the documents that we file with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

This Annual Report includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this Annual Report appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames.

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Part I.

Item 1. Business.

Overview

We are a clinical-stage biotechnology company with a pipeline of novel biologic therapeutic candidates, developed using our protein engineering expertise and proprietary single domain antibody, or sdAb, platform. With the goal of addressing unmet medical needs, we leverage our deep understanding of target biology and innovative protein engineering technologies to create therapeutic candidates with attributes and mechanisms of action that are superior to current approaches and applicable to a range of challenging, validated targets with high potential. Our sdAb platform allows us to pursue validated targets with clinical promise where other antibody and biologic based approaches have failed. Highly modular, our sdAbs can be combined with precise valencies and multiple specificities, creating therapeutic candidates designed to be capable of enhanced cell signaling, conditional activation or combined synergistic functions.

Our clinical pipeline is enabled by our protein and process engineering capabilities, and includes therapeutic candidates in the following categories:

•INBRX-101 seeks to maintain the natural function of Alpha-1 antitrypsin, or AAT, in a recombinant format, optimized for less frequent dosing and greater potential therapeutic activity as compared to plasma-derived AAT, or pdAAT;

•INBRX-109 and INBRX-106 utilize our multivalent formats, for which the precise valency was optimized in a target-centric way to mediate what we believe to be the most appropriate agonist function; and

•INBRX-105’s mechanism of action is enabled by a multi-specific format that we believe enables programmed death-ligand 1, or PD-L1, targeted 4-1BB agonism.

INBRX-101	INBRX-109	INBRX-106	INBRX-105
AAT-Fc fusion protein	Tetravalent DR5 agonist	Hexavalent OX40 agonist	PD-L1x4-1BB tetravalent conditional agonist

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Program	Therapeutic Area	Target(s)/Format	STAGE OF DEVELOPMENT
			Preclinical	Phase 1	Phase 2	Phase 3
INBRX-101*	Orphan/Respiratory	Neutrophil Elastase Inhibitor AAT-Fusion Protein
INBRX-109**	Oncology	DR5 Tetravalent Agonist
INBRX-106***	Oncology	OX40 Hexavalent Agonist
INBRX-105***	Oncology	PD-L1 x 4-1BB Tetravalent Conditional Agonist

__________________

*    Commercialization and development rights outside of the United States and Canada, subject to an option agreement with Chiesi Farmaceutici S.p.A., or Chiesi.

**    Third party partnership with Chinese biotechnology company, Transcenta Holding, Ltd. (formerly Hangzhou Just Biotherapeutics Co., Ltd.), or Transcenta, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

***    Third party partnership with Chinese biotechnology company, Elpiscience Biopharmaceuticals, Inc, or Elpiscience, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

Our Leadership Team

We have assembled a team with deep scientific and clinical experience in discovering and developing protein therapeutics. Our in-house capabilities span the disciplines of discovery, protein engineering, cell biology, translational research, chemistry, manufacturing and controls, or CMC, clinical development, and commercialization. Members of our team bring experience from multiple organizations including Genentech, Inc., Gilead Sciences, Inc., Merck & Co., Novartis AG, Pfizer Inc., and the Takeda Pharmaceutical Company Limited. Our board of directors is comprised of individuals with proven business and scientific accomplishments and significant operating knowledge of our company.

Our Strategy

Our mission is to discover and develop effective biologic treatments for people with life-threatening conditions and to evolve Inhibrx into a commercial-stage biotechnology company with a differentiated and sustainable product portfolio by focusing on the following:

Rapidly advance and optimize the clinical development of our lead programs.

We are focused on rapidly advancing our four therapeutic candidates, each with key clinical data readouts expected in 2022 and during the first half of 2023. To augment our U.S.-centric clinical strategy for our oncology therapeutic candidates, we have formed collaborations in China designed to provide access to patient populations for clinical trials not readily available in the United States, including treatment-naïve patients, and to facilitate rapid patient enrollment with the goal of generating more robust early clinical data. We believe this harmonized clinical strategy may allow us to accelerate our development timelines.

Apply our sdAb platform and other protein technologies to create differentiated therapeutics in focused disease areas with particular emphasis on oncology.

We have developed an sdAb platform and other protein technologies that we believe can be applied to meet the specific challenges of complex target biology. Our current pipeline is focused on oncology and orphan diseases. We plan to focus our internal clinical development where we believe we can create solutions to address the challenges of both validated and novel targets and generate differentiated therapeutics that can be advanced efficiently through clinical development.

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Maintain our culture of innovation, execution and efficiency.

Over the last 12 years we have successfully built an innovative culture that encourages scientific risk-taking within the bounds of our data-driven philosophy. This enables our research and development team to discover numerous promising preclinical candidates cost effectively, from which we select what we believe are highly differentiated programs for clinical development.

Maximize the potential of our therapeutic pipeline by retaining rights as well as selectively entering into additional strategic partnerships depending on the therapeutic candidate, indication and geography.

We have a disciplined strategy to maximize the potential of our therapeutic pipeline by retaining development and commercialization rights to those therapeutic candidates, indications and geographies that we believe we can develop and eventually commercialize successfully and efficiently on our own if they are approved, while also seeking to enter into additional strategic partnerships where we believe partnering will accelerate our development timelines and/or maximize the worldwide commercial potential of any approved therapeutic candidates. For example, we have granted Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada following completion of the Phase 1 trial. In addition, we are currently party to license agreements for the development and, if approved, commercialization of INBRX-105, INBRX-106 and INBRX-109 solely in China, Hong Kong, Macau and Taiwan. We otherwise possess the worldwide rights to these candidates. Where appropriate, we plan to seek to enter into additional strategic partnerships with the goal of maximizing the potential of our therapeutic pipeline.

Selectively enter into additional strategic partnerships to maximize the potential of our protein engineering technologies in non-core areas or indications ancillary to oncology.

We believe that the broad potential of our protein engineering technologies, coupled with our strong intellectual property portfolio, can lead to the generation of multiple additional novel product candidates addressing a wide range of therapeutic areas. For example, we licensed our sdAb technologies for specific binders to 2seventy bio, Inc. (formerly bluebird bio, Inc.), or 2seventy, for use in cell therapy. Moreover, we have several preclinical programs focused on non-oncology indications that we are actively seeking to license. Where appropriate, we plan to continue to seek to opportunistically enter into additional strategic partnerships in areas that are considered non-core or indications ancillary to oncology to maximize the potential of our technology platform.

Our sdAb Platform Technology

Antibodies are multifunctional, Y-shaped proteins, made up of a pair of interacting heavy and light chains to form a symmetric, dimeric molecule with four total protein chains. Each arm of the antibody contains an antigen binding region (also referred to as the variable fragment, or Fv), which consists of both a heavy and light variable domain, or VH and VL, respectively, held together through interaction of constant domains. The Fc (Fragment, crystallizable) portion of the heavy-chain constant domain extends the half-life of the antibody in circulation and has the potential to modulate the function of immune cells through interaction with various Fc receptors found on the surface of cells of the immune system.

We believe that antibody Fv domains are not optimal building blocks for multispecific and multivalent therapeutics due to the extensive protein engineering required to ensure the correct pairing of the appropriate VH and VL domains to construct functional Fvs. To overcome the limitations and formatting challenges of conventional antibodies, we developed our sdAb platform to enable the streamlined production of protein formats with multiple antigen specificities.

sdAbs provide a small, simple, modular target binding domain that can be combined in a variety of ways to meet the unique needs of each biological target. We have deep domain expertise surrounding discovery, humanization and optimization of sdAbs and their incorporation into unique configurations enabling the generation of therapeutic candidates with favorable drug-like properties and differentiated mechanisms of action. We have created various multivalent and multispecific therapeutic formats that are each designed to achieve unique functions specifically tailored to the requirements of a given biological target, including the ability to:

•effectively cluster receptors with precisely defined valency;

•simultaneously engage multiple antigens or epitopes;

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•combine synergistic functions in a single molecule;

•restrict therapeutic activity to specific micro environments in the body; and

•be readily manufactured at high yields with established processes used to produce therapeutic proteins.

We have also developed a series of patented modifications to our humanized sdAb scaffold, which are designed to eliminate recognition by pre-existing anti-drug antibodies without compromising affinity, specificity or stability of the sdAb. Previously, the presence of pre-existing anti-drug antibodies in human serum limited the broad use of these agents as therapeutics. We believe our improvement, combined with our extensive knowledge of the structural nuances of sdAbs, will enable modernized development of therapeutic candidates with favorable biophysical properties, and will greatly extend the utility and applicability of our sdAb platform.

Our Pipeline

INBRX-101

INBRX-101 is a precisely engineered recombinant human AAT-Fc fusion protein therapeutic candidate that we are developing for the treatment of patients with Alpha-1 Antitrypsin Deficiency, or AATD. We believe INBRX-101 has the potential to be dosed monthly, while maintaining patients in the normal range of AAT exposure, which would be a significant improvement for patients currently receiving weekly infusions. Through our proprietary engineering capabilities, we were able to overcome the challenges of producing AAT recombinantly and manufacturing at commercial scale.

Overview of AATD

AATD is an inherited disease that causes an increased risk of developing pulmonary disease defined by progressive loss of lung tissue and function and is associated with decreased life expectancy. The pulmonary manifestations of AATD include the entire spectrum of emphysema and disorders associated with chronic obstructive pulmonary disease. Patients with AATD harbor mutations in the AAT-encoding gene Serpin family A member 1, which causes AAT protein misfolding, loss of activity, and retention in the liver. AAT is a protease inhibitor that primarily targets human neutrophil elastase, or NE, an enzyme that is released by white blood cells in response to infections and has the capacity to degrade normal tissues, especially in the lung, if not tightly controlled by AAT.

Unmet Medical Need

This disease affects roughly 100,000 people in the United States, with a similar number of patients in Europe. Since AATD must be diagnosed using laboratory testing and cannot be diagnosed by symptoms or by a medical examination alone, it is believed that many individuals with AATD are likely undiagnosed or misdiagnosed. In April 2017, the United States Food and Drug Administration, or FDA, allowed for the marketing of direct-to-consumer tests that provide genetic risk information for certain conditions, including AATD. We believe such tests will lead to earlier diagnosis and an increase in the number of patients identified with AATD.

The approved standard of care for AATD has been augmentation therapy using pdAAT and has not been substantially improved since 1987. Plasma-derived treatments are highly dependent on human donor blood supply, which is costly and can be limited. Due to the short half-life of pdAAT therapeutics, patients require weekly infusions to achieve and maintain serum concentration above the protective threshold, presumed to be 11 µM. However, even with frequent treatments, the AAT serum concentration following treatment remains considerably below the normal range of 20 to 50 µM. There is clinical evidence suggesting that maintenance of higher AAT serum trough levels may better protect against lung function decline. The graph below is an adaptation based on published data that depicts the pharmacokinetic profile of pdAAT. The published results from the RAPID trial(1) revealed the correlation of serum AAT through levels and lung density decline in AATD patients. Additionally, there are other significant barriers to treatment for patients with AATD, including under-diagnosis, high cost of chronic augmentation therapy, difficulties associated with administering intravenous infusions on a weekly basis, and plasma collection practices that may not be sustainable.

(1) Chapman KR, Burdon JG, Piitulainen E, Sandhaus RA, Seersholm N, Stocks JM, Stoel BC, Huang L, Yao Z, Edelman JM, McElvaney NG. (2015) Intravenous augmentation treatment and lung density in severe α1 antitrypsin deficiency (RAPID): a randomised, double-blind, placebo-controlled trial. The Lancet. Jul 25;386(9991):360-8

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Our Solution - INBRX-101

INBRX-101 is a recombinant AAT protein that is comprised of two human AAT molecules covalently linked to the Fc region of human immunoglobulin G4. AAT has proven difficult to develop recombinantly, often displaying loss of activity and experiencing accelerated degradation. Fusion of AAT to the Fc region allows for production using a standard antibody expression system, which, when combined with our proprietary AAT-function preserving purification process, generates substantial and scalable yields of active recombinant AAT protein.

Clinical Data

In July 2019, we initiated an open-label, dose escalating Phase 1 trial which is being conducted in approximately 10 clinical sites in the United States, the United Kingdom and New Zealand and will enroll a total of approximately 42 patients. The trial is designed as single ascending dose, or SAD, administrations of INBRX-101, with doses of 10

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mg/kg, 40 mg/kg, 80 mg/kg or 120 mg/kg, followed by multiple ascending dose, or MAD, administrations of INBRX-101, with doses of 40 mg/kg, 80 mg/kg or 120 mg/kg. These doses are administered every three weeks intravenously to patients diagnosed with AATD who are either treatment naïve or previously treated with pdAAT therapeutics. The primary objective of the trial is safety and tolerability. Secondary objectives include AAT serum exposure, immunogenicity, as measured by frequency of anti-drug antibodies, and NE activity. Exploratory endpoints include biomarkers of AAT. In addition, we will measure pharmacokinetic and pharmacodynamic biomarkers in bronchoalveolar lavage fluid, or BALF, for those patients who received MAD administrations of INBRX-101 at doses of 80 mg/kg or 120 mg/kg.

In October 2021, we announced initial results from Phase 1, Part 1 (SAD) of this trial. Interim functional pharmacokinetic, or PK, data were from 21 patients with AATD, all with the ZZ mutation of the SERPINA1 gene. Interim safety data were from 24 patients with AATD. There were no drug-related severe or serious adverse events at doses up to and including 120 mg/kg single dose and 80mg/kg multi-dose. Drug-related adverse events were predominantly mild with a few moderate events and all were transient and reversible. No signs of neutralizing anti-drug antibodies were seen.

Dose related increases in maximal and total INBRX-101 exposure occurred across the entirety of the tested SAD range of 10 to 120 mg/kg.

–The shaded region represents the normal range of functional AAT in healthy adults.

–The dashed line at 11µM indicates the functional AAT goal of the current augmentation therapy with pdAAT.

–Day 21 data from the 120 mg/kg cohort are from the first 2 enrolled patients with available data.

–Results shown are from preliminary, unaudited data announced in October 2021.

Data from the first MAD cohort of INBRX-101 at 40 mg/kg IV every three weeks showed the expected accumulation of functional AAT levels with observed trough levels exceeding the goal of the current standard augmentation therapy with pdAAT.

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We expect to announce additional data from this trial during the first half of 2022, including BALF data for those patients who received MAD administrations of INBRX-101 at doses of 80 mg/kg or 120 mg/kg. The end of Phase 1 meeting with the FDA will be planned after completion of this study, and based on the feedback from the agency, a potentially registration-enabling Phase 2 program will be initiated.

INBRX-109

INBRX-109 is a precisely engineered tetravalent sdAb-based therapeutic candidate targeting death-receptor 5, or DR5, a TNFRSF member, also known as tumor necrosis factor-related apoptosis-inducing ligand, or TRAIL, receptor 2. DR5 activation induces cancer-specific programmed cell death. The valency of INBRX-109 was selected to maximize the therapeutic index. In patients treated with INBRX-109 to date in our Phase 1 clinical trial, we have observed signs of single agent activity in serious, life-threatening medical conditions that have limited treatment options. We initiated cohorts with INBRX-109 in combination with standard chemotherapies in several indications. Additionally, in June 2021, we initiated a potential registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma.

Background on DR5

Apoptosis is a critical process for maintaining healthy tissue homeostasis, but this process is frequently altered in cancer patients leading to the accumulation of malignant cells. Apoptotic signaling pathways are tightly regulated by the balance of pro- and anti-apoptotic factors, and their therapeutic modulation has the potential to be exploited for the treatment of cancer. Targeting the anti-apoptotic proteins has been a clinically successful strategy. For example, Venetoclax, an inhibitor of B-cell lymphoma 2, or Bcl-2, was approved by the FDA for the treatment of chronic lymphocytic leukemia in 2016.

Alternatively, we believe therapeutically targeting pro-apoptotic proteins such as DR5 is a promising oncology treatment strategy. DR5 signaling is induced by clustering of multiple receptors, which initiates an apoptotic signaling pathway resulting in cell death. The strength of apoptotic signaling is proportional to the degree of DR5 clustering. Importantly, although DR5 is expressed throughout the body, cancer cells have been shown to be more sensitive to DR5 signaling compared to healthy cells of normal tissues.

The promise of inducing cancer-specific cell death has led to extensive efforts by pharmaceutical and biotechnology companies to therapeutically exploit the DR5 pathway for the treatment of cancer. These initial efforts centered around developing recombinant versions of the DR5 ligand, TRAIL, and agonistic bivalent DR5 antibodies. Despite

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demonstrated clinical safety as single agents and in combination with chemotherapies, these first generation DR5 agonists failed to meet clinical efficacy endpoints. We believe these failures were caused by insufficient clustering of DR5, which is necessary for activation of this pathway.

Unmet Medical Need

We are currently investigating INBRX-109 in chondrosarcoma, Ewing sarcoma, malignant pleural mesothelioma, colorectal and pancreatic adenocarcinomas. These are some of the most aggressive diseases, some of which are also orphan oncology indications that have shown signs of activity in preclinical studies. These indications and many of these cancer subtypes do not respond well to currently approved immunotherapies and represent a significant unmet need.

Our Solution - INBRX-109

INBRX-109 is a tetravalent agonist of DR5 that we designed with our sdAb platform to drive cancer-selective programmed cell death and to maximize potency while minimizing on-target liver toxicity arising from hepatocyte apoptosis. We believe INBRX-109 has the potential to overcome the limitations of previous DR5 agonists. As shown in the diagram below, INBRX-109 is comprised of four DR5 targeted sdAbs fused to an Fc region that has been modified to prevent Fc receptor interactions. In preclinical studies, we have observed that INBRX-109 has the ability to potently agonize DR5 through efficient receptor clustering, causing cancer cell death. Based upon experience with earlier generation DR5 agonists, hepatocytes appear to be a non-cancerous cell type particularly sensitive to DR5 agonism. We have engineered INBRX-109 with our proprietary sdAb modifications to reduce recognition by pre-existing anti-drug antibodies in humans, which can lessen the potential for hyper-clustering and thereby reduce potential hepatotoxicity.

Primary objectives of the Phase 1 trial are safety, tolerability, and determination of the maximum tolerated dose, or MTD, and recommended Phase 2 dose. Secondary objectives were serum exposure and immunogenicity, as measured by frequency of anti-drug antibodies. Exploratory objectives included clinical anti-tumor efficacy, based on response rate, duration of response, disease control rate, progression-free survival and overall survival, as well as evaluation of potential predictive diagnostic and pharmacodynamic biomarkers.

INBRX-109: Tetravalent DR5 Agonistic Antibody

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Clinical Data

The IND, or Investigational New Drug Application, for INBRX-109 became effective in August 2018, and we initiated a Phase 1 clinical trial in the United States in November 2018. This Phase 1 clinical trial is designed as an open-label, three-part trial in patients with locally advanced or metastatic solid tumors.

Phase 1 INBRX-109 Trial Design and Status
First in human Phase 1 trial started November 2018
Part 1: Dose Escalation	⇨ ⇨	Part 2: Dose Expansion Cohorts		⇨ ⇨	Part 3: Combination Studies
Completed		Ongoing			Ongoing
Dose Range: 0.3 to 30 mg/kg N= 20 Result: Maximum tolerated dose not reached		N=34	Chondrosarcoma		N=20	Mesothelioma with Cisplatin/Carboplatin & Mesothelioma with Cisplatin or Carboplatin and Pemetrexed
		N=10	Synovial sarcoma
		N=22	Malignant pleural mesothelioma		N=20	Ewing sarcoma with Irinotecan & Temozolomide
		N=20	Colorectal cancer		N=20	Pancreatic adenocarcinoma 2nd line with mFOLFIRI
		N=10	Gastric adenocarcinoma		N=20	Colorectal cancer with FOLFIRI

Part 1

Part 1 of the trial utilized a traditional 3+3 dose escalation design escalating INBRX-109 as a single agent from 0.3 mg/kg to 30 mg/kg. Twenty patients were enrolled in this portion of the trial, which was completed in August 2019. INBRX-109 was observed to be well-tolerated without significant toxicities observed at doses up to and including the maximum administered dose of 30 mg/kg. No MTD was reached.

Part 2

In September 2019, we commenced single agent dose expansion cohorts, Part 2 of this trial. As of February 1, 2022, we have enrolled approximately 112 patients in single agent dose cohorts in the following tumor types: colorectal and gastric adenocarcinomas, malignant pleural mesothelioma, chondrosarcoma and synovial sarcoma.

Part 3

To date, we have initiated chemotherapy combination cohorts in malignant pleural mesothelioma, pancreatic adenocarcinoma, Ewing sarcoma and colorectal cancer cohorts. We expect to announce initial data from these cohorts in late 2022.

Initial Results from Phase 1, Part 2

INBRX-109 Chondrosarcoma

Chondrosarcoma is a rare malignant bone tumor composed of cartilage matrix-producing cells. It is reported to be the second most common primary bone sarcoma with an incidence of 1 in 200,000 per year globally. The incidence in the United States is reported to be about 1,400 cases per year. There is currently no approved systemic treatment for patients with unresectable or metastatic disease. The placebo arm of a placebo-controlled trial, which tested the hedgehog pathway inhibitor IPI-926 in this indication had a progression free survival of approximately three months. In this trial, IPI-926 did not result in any partial responses and only a small subset of patients had minor reductions in their tumor size.

Stable disease or partial responses were observed in 16 out of 22 patients with chondrosarcoma based on the initial data from the chondrosarcoma cohort of our Phase 1 trial. Two of these patients’ scans were still pending and four of these patients were still on treatment as of October 1, 2021. In January 2021, the FDA granted fast track designation to INBRX-109 for the treatment of patients with unresectable or metastatic conventional chondrosarcoma. On November 24, 2021, the FDA granted orphan-drug designation for INBRX-109 for the treatment of chondrosarcoma.

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In June 2021, we initiated a potential registration-enabling Phase 2 trial in this patient population, which will enroll approximately 200 patients in total, with progression free survival as the primary endpoint. We expect to announce data from this trial in mid-2024.

Primary objectives of the ongoing Phase 2 trial are to evaluate the efficacy of INBRX-109 as measured by progression free survival, or PFS, as measured by an independent radiology review. Secondary objectives are to evaluate the overall survival, PFS by investigator assessment, quality of life, objective response rate, disease control rate, safety and tolerability, pharmacokinetics and anti-drug antibodies to INBRX-109.

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Phase 2 Trial Design
Randomized, Blinded, Placebo-controlled, Phase 2 Study of INBRX-109 in Unresectable or Metastatic Conventional Chondrosarcoma
Randomization 2:1 Key eligibility criteria: • Conventional chondrosarcoma • Unresectable or metastatic Stratification by line of therapy and IDH1/2 mutation status			⇨ ⇨	Until progressive disease (PD) or toxicity Including interim analysis       • Primary Endpoint: progression free survival (PFS) • Secondary Endpoints: overall survival (OS), quality of life (QoL), overall response rate (ORR)/duration of response (DOR), disease control rate (DCR)
		INBRX-109 N= 134
	<
		Placebo N= 67 (allows for crossover)

INBRX-109 Malignant Pleural Mesothelioma

Mesothelioma is a malignant tumor most often caused by inhaled asbestos fibers which accumulate in the lining of the lungs, abdomen or heart. The epithelioid subtype is the most common histology of malignant pleural mesothelioma, reportedly comprising about 70% of all cases. It is estimated that as many as 43,000 people worldwide die from mesothelioma each year. There are currently limited approved therapeutic treatments.

We observed signs of single agent activity in the Phase 1, part 1 malignant pleural mesothelioma, epithelioid subtype cohort. Time on treatment with INBRX-109 was equal to or greater than 24 weeks in seven of the 19 patients (~37%).

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Based on the single agent activity observed, we initiated a chemotherapy combination cohort in malignant pleural mesothelioma with Carboplatin/Cisplatin and Pemetrexed, which is currently enrolling. We expect to announce initial data from these cohorts in late 2022.

Future Clinical Development Plans

We continue to investigate the therapeutic utility of INBRX-109 through a broad clinical development plan across difficult-to-treat cancers. Other future clinical development of INBRX-109 may include combinations with additional chemotherapies and potentially synergistic agents in several solid tumors and hematologic malignancies. We are currently conducting preclinical studies with INBRX-109 and various rational combination agents, including targeted therapeutics and apoptotic pathway modulators, aimed at guiding our future clinical plans.

INBRX-106 AND INBRX-105

INBRX-106 is a hexavalent OX40 agonist, currently being investigated as a single agent and in combination with Keytruda, a PD-1 blocking checkpoint inhibitor, in patients with locally advanced or metastatic solid tumors. INBRX-105 is a conditional 4-1BB agonist that is currently being investigated as a single agent and in combination with Keytruda in patients with locally advanced or metastatic solid tumors.

Background on Immunotherapy

A notable recent success in cancer treatment is the approval of checkpoint inhibitor immunotherapies as therapeutic agents. Immune checkpoints are key mechanisms that fine-tune and control the body’s immune response. In the cancer setting, tumors have developed strategies for hijacking these checkpoints, preventing an immune response to

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the cancer and allowing the tumor cells to proliferate unchecked. Checkpoint inhibitor immunotherapies were developed to overcome this phenomenon by relieving immune cell inhibition, resulting in a potentially long-lasting amplification of the anti-tumor immune response. Therapies against checkpoint proteins, such as PD-1 and PD-L1, produced impressive results in clinical development, resulting in marketing approvals in a number of malignancies.

Unmet Medical Need

Despite unprecedented clinical response rates, the majority of patients fail to respond to therapies targeting PD-1 and PD-L1. We believe this is in part because T-cells require co-stimulation for full functionality. Thus, checkpoint inhibition alone is likely insufficient to fully enable the immune system to attack a tumor, and we believe further benefit could be derived by the addition of immune co-stimulatory agents.

We believe INBRX-106 and INBRX-105 have the potential to combine with the fast-growing immunooncology market, which currently has annual sales of over $20 billion.

INBRX-106

Background on OX40

OX40, a member of the TNFRSF, is predominately expressed and is a key co-stimulatory receptor on activated T-cells. Signaling through OX40 provides co-stimulation that promotes T-cell expansion, enhanced effector function and memory cell formation, and prevents activation-induced cell death. The natural mechanism of OX40 activation is via the interaction with its trimeric ligand, OX40L, which serves to effectively cluster multiple OX40 molecules and facilitate downstream signaling leading to nuclear factor kappa-light-chain-enhancer of activated B cells, or NFkB, activation. Based on the capacity for OX40 signaling to enhance anti-tumor immunity in preclinical studies, there have been many efforts to therapeutically exploit this pathway for cancer immunotherapy. Most previously developed agents were bivalent OX40 agonists, the configuration of which we believe to be poorly suited for efficient receptor clustering, evidenced by the lack of clinical responses observed for such molecules.

Our Solution

INBRX-106 is a precisely engineered hexavalent sdAb-based therapeutic candidate targeting OX40, designed to be an optimized agonist of this co-stimulatory receptor. As shown in the diagram below, INBRX-106 is composed of six OX40 targeting sdAbs and a functional Fc domain.

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As a hexavalent therapeutic candidate, INBRX-106 is designed to bind six OX40 molecules on the cell surface to mediate efficient receptor clustering and downstream signaling. In preclinical studies, we observed that INBRX-106 elicited superior OX40 agonism when compared to the bivalent antibodies, 1A7 (analog of MOXR-0916) or 1D10 using an OX40 expressing NFkB reporter cell line, wherein clustering of OX40 receptor mediated signaling culminated in luciferase expression. We also observed that INBRX-106 can mediate T-cell co-stimulation and reduce the suppressive activity of regulatory T-cells. Additionally, INBRX-106 is able to exploit IgG-mediated effector function via the Fc domain.

Clinical Data

We initiated a Phase 1 clinical trial in December 2019 for INBRX-106. This Phase 1 trial is designed as an open-label, four-part trial in patients with locally advanced or metastatic solid tumors. We expect the entire trial will be conducted at approximately 12-16 clinical sites in the United States and enroll approximately 145 patients. Primary objectives of the trial are safety and tolerability, and the determination of the MTD and recommended Phase 2 dose of INBRX-106 as a single agent and in combination with Keytruda. Secondary objectives are serum exposure, immunogenicity, as measured by the frequency of anti-drug antibodies, and clinical anti-tumor efficacy per RECIST (version 1.1) and immune RECIST based on response rate, duration of response, disease control rate, progression-free survival and overall survival. Exploratory objectives will include evaluation of potential predictive diagnostic and pharmacodynamic biomarkers.

Phase 1 INBRX-106 Trial Design and Status
First in human Phase 1 trial started December 2019
Part 1: Single Agent Dose Escalation	⇨ ⇨	Part 2: Single Agent Dose Expansion	⇨ ⇨	Part 3: Combination Dose Escalation	⇨ ⇨	Part 4: Combination Dose Expansion
Complete		Ongoing		Complete		Ongoing
Dose Range: 0.0003 to 3 mg/kg N= 20 Result: Maximum tolerated dose not reached		RP2D Two Dosing Schedules N=24		INBRX-106 + Keytruda MTD: 0.1 mg/kg N=21 Durable responses observed in tumor types responsive to immunotherapy		INBRX-106 + Keytruda CPI Refractory (N=20 each) N=20 PD-L1+ NSCLC N=20 PD-L1+ baskett CPI Naive (N=10 each) PD-L1+ melanoma PD-L1+ ocular melanoma PD-L1+ head & neck PD-L1+ nasopharyngeal carcinoma

Part 1 of the trial utilized a traditional 3+3 algorithm for single agent dose escalation from 0.0003 mg/kg to 3 mg/kg in twenty patients. INBRX-106 was observed to be generally well tolerated in humans. The most common adverse effects, or AEs, reported for INBRX-106 were Grade 1 and 2 rashes or dermatitis, cytokine release syndrome, fatigue, and infusion-related reactions. Notably, cutaneous toxicities are common immune-related AEs associated with immune checkpoint inhibitors. These mostly mild or moderate and likely immune-related toxicities were in line with the mechanism of action of this candidate therapeutic. The maximum administered dose was 3 mg/kg and the MTD level was not reached.

Part 2 of the trial, single agent dose expansion, administers INBRX-106 in two different dosing schedules to patients with tumor types responsive to checkpoint inhibitors. Utilization of extensive biomarker data guided the determination of the optimal dose for Part 2 of the trial, which we believe to be 0.03 mg/kg. Key attributes leading to the choice of this dose level included OX40 occupancy data, evidence of peripheral memory T-cell activation and proliferation, and sufficient drug clearance to allow target recovery prior to the next dose administration. Part 2 treatment cohorts of this trial, which are still ongoing, are in the following tumor types: non-small cell lung cancer, melanoma, head and neck squamous cell carcinoma, gastric or gastro-esophageal junction adenocarcinoma, renal cell carcinoma, and urothelial (transitional) cell carcinoma.

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In Parts 1 and 2 we have observed stable disease, per investigator assessment, of greater than six months in four out of 10 response evaluable non-small cell lung cancer and melanoma patients. Three of the four patients had previous exposure to checkpoint inhibitors and one uveal melanoma patient was checkpoint naive. The longest duration of stable disease as of January 10, 2022 was 95 weeks and ongoing in a non-small cell lung cancer patient refractory to Keytruda.

In Parts 3 and 4 of this trial, INBRX-106 is being evaluated in combination with Keytruda, a PD-1 blocking checkpoint inhibitor. In the all-comer Part 3 of the trial, INBRX-106 was escalated in combination with Keytruda and enrolled 21 patients with locally advance or metastatic solid tumors. It was observed to be well tolerated, with predominantly mild or moderate immune-related toxicities noted. The MTD was determined to be 0.1 mg/kg dosed every three weeks. Two durable partial responses with duration of greater than six months and ongoing were observed in two CPI-naive patients, one with nasopharyngeal carcinoma and one with uveal melanoma. Additionally, there was one double-digit reduction in tumor size with duration greater than four months in a cutaneous melanoma patient who had been previously exposed to checkpoint inhibitors.

Future Clinical Development Plan

Part 4, INBRX-106 combination expansion cohorts, which initiated in December 2021, will enroll approximately 80 patients who are positive for PD-L1 expression as determined by immunohistochemistry and possessing adequate hematologic and organ function, to qualify for enrollment. Forty of these patients will be checkpoint refractory with non-small cell lung cancer and a basket of other indications. An additional 40 patients will be checkpoint naive, enrolling 10 patients in each of the following indications: cutaneous melanoma, uveal melanoma, head and neck squamous cell carcinoma, and nasopharyngeal carcinoma. We expect to announce initial data from the dose expansion cohorts in combination with Keytruda during the second half of 2022.

INBRX-105

Background on 4-1BB

4-1BB, or TNFRSF9, a member of the TNFRSF, is a promising co-stimulatory receptor that we believe can synergize with checkpoint inhibitors to address the insufficiency of checkpoint inhibition alone. 4-1BB is expressed on recently activated T-cells but is largely absent from circulating T-cells under normal conditions. Agonistic 4-1BB antibodies have exhibited anti-tumor activity in mouse models of cancer, especially in combination with other immunomodulatory or tumor targeted therapeutics. These observations motivated the clinical advancement of antibodies designed to agonize 4-1BB and co-stimulate tumor reactive T-cells. Most recently, urelumab, a 4-1BB agonist, showed initial signs of single agent therapeutic efficacy, but clinical investigation was halted due to dose-limiting liver toxicities.

Our Solution

INBRX-105 is a precisely engineered multi-specific sdAb-based therapeutic candidate that is designed to agonize 4-1BB selectively in the presence of PD-L1, which is typically found in the tumor microenvironment and associated lymphoid tissues. PD-L1 is a validated biomarker for tumors with the potential for anti-tumor immune activation and thus we believe represents an ideal anchor antigen to drive 4-1BB agonism. The image below illustrates the unique structure of INBRX-105:

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INBRX-105: A PD-L1 Targeted 4-1BB Agonist

We believe INBRX-105 can overcome the toxicity issues that have limited the success of prior 4-1BB agonists based on its potential to selectively activate 4-1BB + T-cells in the tumor microenvironment, and thus alter the T-cell population, and enrich for cells with anti-tumor capacity. We expect to achieve the maximal therapeutic benefit of INBRX-105 in combination with a PD-1 checkpoint blockade. Our preclinical studies demonstrate that acute exposure to PD-L1 dependent 4-1BB agonism is sufficient to derive maximal anti-tumor activity when co-dosed with another PD-1 blocking agent at a target saturating dose.

Clinical Data

We initiated a Phase 1 clinical trial for INBRX-105 in the United States in February 2019. This Phase 1 trial is designed as an open-label, four-part trial in patients with locally advanced or metastatic solid tumors and is being conducted at approximately 14-18 clinical sites in the United States.

Primary objectives of the Phase 1 trial are safety, tolerability, and the determination of the MTD and recommended Phase 2 dose of INBRX-105 as a single agent and in combination with Keytruda. Secondary objectives are serum exposure, immunogenicity, as measured by frequency of anti-drug antibodies. Exploratory objectives include clinical anti-tumor efficacy per Response Evaluation Criteria in Solid Tumors, or RECIST (version 1.1, or v1.1), and immune RECIST based on response rate, duration of response, disease control rate, progression-free survival and overall survival, as well as evaluation of potential predictive diagnostic and pharmacodynamic biomarkers.

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Phase 1 INBRX-105 Trial Design and Status
First in human Phase 1 trial started February 2019
Part 1: Single Agent Dose Escalation	⇨ ⇨	Part 2: Single Agent Dose Expansion		⇨ ⇨	Part 3: Combination Dose Escalation	⇨ ⇨	Part 4: Combination Dose Expansion
Completed		Ongoing			Ongoing		Planned
INBRX-105 N=32 Dose range: 0.001 to 3 mg/kg		INBRX-105 N=32			INBRX-105 + Keytruda N=15+ No pre-screening, all-comers		INBRX-105 + Keytruda N= 80
		N=8 N=8 N=8 N=8	PD-L1+ NSCLC PD-L1+ Melanoma PD-L1+ Head & Neck Squamous Cell Cancer PD-L1+ Basket				N=20 N=20 N=20 N=20	PD-L1+ NSCLC PD-L1+ Melanoma PD-L1+ Basket PD-L1+ (1-49%) NSCLC, CPI naive

Part 1, single agent dose escalation, was completed with a total of 32 patients enrolled. We observed dose-limiting toxicities, which were consistent with immune related adverse events, such as hepatitis, arthritis and myalgia/hyperthyroidism, at several dose levels and determined the 1 mg/kg dose level as the MTD of INBRX-105. Patients in this part of the study were not pre-screened for PD-L1 expression. Eight out of 18 evaluable patients (44%), who were dosed at the 0.1 mg/kg dose level or above, achieved stable disease, with the greatest reduction in tumor volume observed to be 20% by RECISTv1.1. The longest duration on treatment with INBRX-105 was 41 weeks, or approximately nine and a half months. Notably, seven patients with stable disease tested positive for PD-L1 expression, with a minimum of 1% positivity as determined by immunohistochemistry (Range 1 to 95%), and the results of one patient are pending. Four of these eight patients were refractory to or progressed on prior PD-1 checkpoint inhibitors.

Part 2, single agent dose expansion, began enrolling during the first quarter of 2021. Part 2 will enroll 32 patients in expansion cohorts in each of non-small cell lung cancer, melanoma, head and neck squamous cell carcinoma, as well as a basket cohort of gastric or gastro-esophageal junction adenocarcinoma, renal cell carcinoma, and urothelial (transitional) cell carcinoma. Patients in the expansion cohorts for Part 2 of this trial must be positive for PD-L1 expression, as determined by immunohistochemistry, to qualify for enrollment.

Part 3, dose escalation of INBRX-105 in combination with Keytruda, will enroll a minimum of 15 patients. These patients are not pre-screened for PD-L1 expression. We expect to announce initial data from this cohort during the second quarter of 2022.

Future Clinical Development Plan

Part 4 of this trial will consist of INBRX-105 in combination with Keytruda, enrolling 80 patients. Approximately 60 patients will be positive for PD-L1 expression and be refractory to or have progressed on prior PD-1 checkpoint inhibitor in each of the following indications: non-small cell lung cancer, melanoma, and a basket cohort of gastric or gastro-esophageal junction adenocarcinoma, renal cell carcinoma, and urothelial (transitional) cell carcinoma. Additionally, we will evaluate an additional combination cohort of approximately 20 checkpoint inhibitor naive non-small cell lung cancer patients that are positive for PD-L1 expression with a tumor proportion scale of between 1-49%. We expect to announce initial data from the Part 4 combination expansion cohorts during the first half of 2023.

License and Collaboration Agreements

We have entered into various license and collaboration agreements. The license agreements discussed below pertain to intellectual property that we own and license to the parties identified below. We retain ownership of the intellectual property subject to the license agreements.

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Elpiscience Agreements

We have entered into two different license agreements with Elpiscience. Each agreement is a standalone license to Elpiscience of a distinct and differentiated protein therapeutic candidate with a separate biological target.

On February 28, 2018, we entered into a license agreement, or the PD-L1 and 4-1BB License Agreement, with Elpiscience, pursuant to which we granted Elpiscience an exclusive license to our bi-specific therapeutic candidate designed to target PD-L1 and 4-1BB, also referred to as INBRX-105. On April 30, 2018, we entered into a license agreement, or the OX40 License Agreement, with Elpiscience, pursuant to which we granted Elpiscience an exclusive license to our multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. Each of the PD-L1 and 4-1BB License Agreement and OX40 License Agreement provides Elpiscience with the right to further advance the respective therapeutic candidate through clinical trials, as well as to manufacture and commercialize these therapeutic candidates in China, Hong Kong, Macau and Taiwan. The PD-L1 and 4-1BB License Agreement and OX40 License Agreement also require us to provide Elpiscience with know-how and materials specific to INBRX-105 and INBRX-106, respectively, including process development and manufacturing data and information necessary to develop INBRX-105 and INBRX-106. Additionally, pursuant to each of the license agreements, Elpiscience granted to us a royalty-free, worldwide, non-exclusive research license to intellectual property created by Elpiscience that incorporates intellectual property we licensed to Elpiscience. In the PD-L1 and 4-1BB License Agreement and OX40 License Agreement, we also agreed to negotiate an agreement to supply Elpiscience with INBRX-105 and INBRX-106, respectively, for their development in China, Hong Kong, Macau and Taiwan.

As payment for the license granted in the PD-L1 and 4-1BB License Agreement, we received a non-refundable upfront payment of $2.5 million and reimbursement of $3.0 million for certain costs we incurred. As payment for the license granted in the OX40 License Agreement, we received a non-refundable fee of $2.5 million, payable in two installments, and reimbursement of $3.4 million for certain toxicology study costs and chemistry, manufacturing and controls costs. In December 2018, we received the first milestone payment of $2.0 million under the PD-L1 and 4-1BB License Agreement. We are also eligible to receive specified developmental and commercial milestone payments of up to an aggregate of $100.0 million under each of the PD-L1 and 4-1BB License Agreement and the OX40 License Agreement. Additionally, we received reimbursement for specific supply-related costs in the amounts of $1.7 million and $1.5 million related to the PD-L1 and 4-1BB License Agreement and the OX40 License Agreement, respectively. Further, each license agreement provides us with the right to receive percentage tiered royalties on future product sales with rates in the high single-digits.

Each of the PD-L1 and 4-1BB License Agreement and the OX40 License Agreement contains representations and warranties, insurance, indemnification and confidentiality provisions customary for similar agreements and arrangements. The terms of the PD-L1 and 4-1BB License Agreement and the OX40 License Agreement commenced on February 28, 2018 and April 30, 2018, respectively, and expire on a country-by-country basis upon the full expiration of Elpiscience’s milestone- and royalty-based payment obligations under each license agreement. The royalty obligations expire upon the later of (i) the expiration of the last valid patent claim for the applicable product in the relevant jurisdiction, and (ii) 12 years following that date of the first commercial sale of the applicable product in the relevant jurisdiction. Each license agreement may be terminated by (i) either party for the uncured material breach of the other party, (ii) either party for bankruptcy or other insolvency proceedings of the other party, and (iii) Elpiscience at any time upon 90 days’ written notice to us. As of December 31, 2021, and based on current plans, the last to expire issued patent (assuming the issuance of a patent based on our pending patent application) licensed under the PD-L1 and 4-1BB License Agreement is projected to expire in January 2037 and the last to expire issued patent (assuming the issuance of a patent based on our pending patent application) licensed under the OX40 License Agreement is projected to expire in August 2039.

Chiesi Option Agreement

In May 2019, we entered into an Option Agreement with Chiesi, which was later amended by the First Amendment to Option Agreement, dated August 19, 2019, or the Chiesi Option Agreement, pursuant to which we granted Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. In August 2019, under the terms of the Chiesi Option Agreement, we received a one-time, non-refundable option initiation payment of $10.0 million. If Chiesi exercises its option under the Chiesi Option

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Agreement, then Chiesi must pay us a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license.

The option period under the Chiesi Option Agreement began on August 19, 2019 and expires 60 days following the last-to-occur of (a) our delivery to Chiesi of trial phase data for the first Phase I Clinical Trial for INBRX-101 (including the complete clinical study report); (b) our delivery to Chiesi of the finalized minutes from the definitive FDA scientific advice meeting conducted following completion of such Phase I Clinical Trial with the use of the full clinical study report if required by the FDA; and (c) our delivery to Chiesi of the finalized minutes from the definitive parallel European Medicines Agency health technology assessment, or EMA-HTA, scientific advice meeting conducted following completion of such Phase I Clinical Trial with full use of the clinical study report if required by the EMA. The Chiesi Option Agreement may be terminated by (i) Chiesi upon 30 days’ written notice to us, (ii) either party for the uncured material breach of the other party, and (iii) either party for bankruptcy or other insolvency proceedings of the other party. The Chiesi Option Agreement contains representations, warranties and indemnification provisions customary for similar agreements and arrangements.

Transcenta License Agreement and Technical Services Agreements

On June 21, 2017, we entered into a license agreement, or the Transcenta License Agreement, with Transcenta, pursuant to which we granted to Transcenta exclusive, non-transferable rights to develop, manufacture, and sell its products containing our mono-specific protein therapeutic candidate, designed to target DR5, or INBRX-109, or a derivative thereof, within China, Hong Kong, Macau and Taiwan. We also agreed to provide Transcenta with the know-how and materials, including assays and cell lines, necessary to develop the therapeutic candidate. Additionally, pursuant to the Transcenta License Agreement, Transcenta granted to us a royalty-free, worldwide, non-exclusive research license to intellectual property created by Transcenta that incorporates intellectual property we licensed to Transcenta. As payment for the license we granted in the Transcenta License Agreement, we received a non-refundable upfront payment of $2.5 million. In August 2018, the Company achieved the first milestone under the contract for $0.5 million. In June 2019, the Company achieved another milestone under the contract for $1.0 million. Additionally, we are eligible to receive certain developmental and commercial milestone payments of up to an aggregate of approximately $100.0 million, as well as percentage tiered royalties on future product sales with rates ranging between the high single-digits to the low teens.

The Transcenta License Agreement contains representations and warranties, insurance, indemnification and confidentiality provisions customary for similar agreements and arrangements. The term of the Transcenta License Agreement commenced on June 21, 2017, and expires on a country-by-country basis upon the full expiration of Transcenta’s milestone- and royalty-based payment obligations under the Transcenta License Agreement. The royalty payment obligations expire on a product-by-product and country-by-country basis at such time that there is (i) no valid patent claim for the applicable product in the relevant jurisdiction, and (ii) no Generic Product (as defined in this Transcenta License Agreement) of an applicable product available in the relevant jurisdiction. As of December 31, 2021, and based on current plans, the last to expire issued patent (assuming the issuance of a patent based on our pending patent application) licensed under the Transcenta License Agreement is projected to expire in July 2036. The Transcenta License Agreement may be terminated by (i) either party for the uncured material breach of the other party, (ii) either party for bankruptcy or other insolvency proceedings of the other party, and (iii) Transcenta at any time upon 90 days’ written notice to us.

On March 19, 2018, we also entered into a technical services agreement, or the March TSA, with Transcenta pursuant to which we provided reasonable assistance with the drug substance transfer between our contract manufacturer and Transcenta. We were reimbursed $0.7 million in April 2018 for the March TSA. The March TSA had a six month term and expired in September 2018. On October 6, 2018, we entered into a second technical services agreement, or the October TSA, to provide reasonable assistance pertaining to the transfer of the drug substance between our contract manufacturer and Transcenta. We were reimbursed $0.4 million in October 2018 for the October TSA. The October TSA also had a six month term and expired in April 2019.

Celgene Agreement

On July 1, 2013, we entered into a license agreement with Celgene, a Bristol Meyers Squibb Company, or Celgene, as amended on November 23, 2018, or the Celgene Agreement, pursuant to which we granted Celgene an exclusive,

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global license for the development, manufacture and commercialization of our proprietary CD47 binding domain, or the Celgene Licensed Intellectual Property. Per the terms of the Celgene Agreement, Celgene is operationally and financially responsible for the development, manufacturing and commercialization activities of Celgene Licensed Intellectual Property and any additional related antibodies covered by the Celgene Agreement.

As payment for the license granted in the Celgene Agreement, we may be eligible to receive development and regulatory milestones of up to an aggregate of $934.1 million, assuming the achievement of all potential milestones in the Celgene Agreement, as well as percentage tiered royalties based on future worldwide sales, with rates ranging from between the high single-digits to the low teens, subject to potential reduction when and if comparable third-party products attain certain levels of competitive market share (on a country-by-country basis) and, subject to certain limitations, payments to third parties for third-party intellectual property rights. Celgene’s royalty obligations expire (on a country-by-country basis) upon the later of (i) the expiration of the last valid patent claim for the applicable Celgene Licensed Intellectual Property or related product in a country, and (ii) 12 years following that date of the first commercial sale of the applicable Celgene Licensed Intellectual Property or related product in a country. We are obligated to pay 2% of future amounts received under the Celgene Agreement to advisors who assisted us with the negotiations and other matters in connection with the Celgene Agreement.

The Celgene Agreement contains representations and warranties, insurance, indemnification and confidentiality provisions customary for similar agreements and arrangements. In addition, Celgene has the sole right, but not the obligation, to enforce the intellectual property included in the Celgene Agreement.

The term of the Celgene Agreement commenced on July 1, 2013 and expires on a licensed product-by-licensed product and country-by-country basis on the date of expiration of Celgene’s applicable royalty obligations. As of December 31, 2021 and based on our current plans, the last to expire issued patent licensed under the Celgene Agreement is projected to expire in 2033, absent any extension of term. The Celgene Agreement may be terminated by (i) either party for the uncured material breach of the other party, (ii) either party for bankruptcy or other insolvency proceedings of the other party, (iii) Celgene at any time upon 30 days’ written notice to us, and (iv) us, upon Celgene’s, or any of its affiliates’, legal challenge to the validity or enforceability of a licensed patent.

2seventy Agreements

The 2018 2seventy Agreement

On December 20, 2018, we entered into an exclusive license agreement with bluebird bio, Inc., or bluebird, pursuant to which we granted to bluebird an exclusive license to use our proprietary sdAb platform to research, develop and commercialize chimeric antigen receptor, or CAR, T-cell therapies. In November 2021, bluebird assigned the agreement, which we refer to as the 2018 2seventy Agreement, to its affiliate, 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under the terms of the 2018 2seventy Agreement, we will provide 2seventy the exclusive worldwide rights to develop, manufacture and commercialize certain cell therapy products containing sdAbs directed to various cancer targets. As payment for the license granted in the 2018 2seventy Agreement, we received a non-refundable upfront payment of $7.0 million. We are also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. In August 2021, we received a $2.0 million milestone payment under this agreement.

The 2018 2seventy Agreement contains representations and warranties, indemnification and confidentiality provisions customary for similar agreements and arrangements. The term of the 2018 2seventy Agreement commenced on December 20, 2018, and expires on a product-by-product and country-by-country basis upon the full expiration of 2seventy’s milestone- and royalty-based payment obligations under the 2018 2seventy Agreement. The royalty obligations under the 2018 2seventy Agreement expire on a product-by-product and country-by-country basis on the later of (i) the expiration of the last valid patent claim for the applicable product in the relevant jurisdiction; (ii) the date on which any applicable regulatory, pediatric, orphan drug or data exclusivity, which provides 2seventy with the exclusive right to market the applicable product in the relevant jurisdiction, expires; and (iii) 12 years following that date of the first commercial sale of the applicable product in a country. As of December 31, 2021 and based on current plans, the last to expire issued patent (assuming the issuance of one or more patents based on our pending patent applications) licensed under the 2018 2seventy Agreement is projected to

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expire in May 2040. The 2018 2seventy Agreement may be terminated by (i) either party for the uncured material breach of the other party, (ii) either party for bankruptcy or other insolvency proceedings of the other party, and (iii) 2seventy at any time upon 30 days’ written notice to us.

The 2020 2seventy Agreement

On June 9, 2020, we entered into an option and license agreement with bluebird, pursuant to which we granted to bluebird exclusive worldwide rights to develop binders and cell therapy products containing sdAbs directed to specified targets, consisting of two initial programs and up to an additional 8 programs. Inhibrx retains all rights to the specific sdAbs outside of the cell therapy field. This agreement, which we refer to as the 2020 2seventy Agreement, was also assigned to 2seventy in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy. We received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and we are entitled to an upfront option fee for each additional program. We also granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under the 2020 2seventy Agreement, which entitles us to additional fees upon exercise of the option. 2seventy may exercise its option on a program-by-program basis during the option term. Additionally, 2seventy may extend the option term for up to six months in the event that there are additional bona fide development activities that 2seventy desires to undertake. We are also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits.

The 2020 2seventy Agreement contains representations and warranties, indemnification and confidentiality provisions customary for similar agreements and arrangements. The term of the 2020 2seventy Agreement commenced on June 9, 2020, and expires on a product-by-product and country-by-country basis upon the full expiration of 2seventy’s milestone- and royalty-based payment obligations under the 2020 2seventy Agreement. The royalty obligations under the 2020 2seventy Agreement expire on a product-by-product and country-by-country basis on the later of (i) the expiration of the last valid patent claim for the applicable product in the relevant country; (ii) the date on which any applicable regulatory, pediatric, orphan drug or data exclusivity, which provides 2seventy with the exclusive right to market the applicable product in the relevant country, expires; and (iii) 12 years following that date of the first commercial sale of the applicable product in such country. As of December 31, 2021, and based on current plans, the last to expire issued patent (assuming the issuance of one or more patents based on our pending patent applications) licensed under the 2020 2seventy Agreement is projected to expire in May 2040. The 2020 2seventy Agreement may be terminated by (i) either party for the uncured material breach of the other party, (ii) either party for bankruptcy or other insolvency proceedings of the other party, and (iii) 2seventy at any time upon prior written notice within a specified number of days before the termination.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. In August 2021, pursuant to the option exercise terms in the agreement, bluebird exercised its option to exclusively license one of the initial programs in exchange for an option exercise fee of $2.1 million, the payment of which was received in October 2021.

Intellectual Property

We strive to protect the proprietary technology and information commercially or strategically important to our business. We seek to obtain and maintain, patent rights intended to cover the technologies incorporated into, or used to produce, our therapeutic candidates, the compositions of matter of our therapeutic candidates and their methods of use and manufacture, as well as other inventions that are important to our business. We also seek to obtain strategic or commercially valuable patent rights in the United States and other jurisdictions.

To cover our proprietary technologies and our current pipeline of proprietary products and related methods, such as methods of use, we have filed patent applications representing 37 patent families. As of December 31, 2021, our patent estate, which is solely owned, included 20 issued United States patents, 23 United States pending non-provisional patent applications, 9 United States pending provisional patent applications, 9 pending Patent Cooperation Treaty, or PCT, applications, 188 issued foreign patents and 317 foreign patent applications currently pending in various foreign jurisdictions.

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Specifically, we own more than six patent families with claims directed to various sdAb and/or multivalent therapeutic antibodies including, for example, our INBRX-105, INBRX-106, and INBRX-109 therapeutic candidates, and related methods of using the same to treat diseases, e.g., cancer, inflammatory disease, or infectious disease. Patent applications in these families are pending in multiple jurisdictions, including, for example, the United States, Australia, European Patent Organization, Canada, China, Japan, Korea, and Russia; as well as PCT applications and several U.S. provisional applications. Patents in these patent families, if granted, are expected to expire between 2036 and 2039, depending upon their respective filing dates and absent any patent term adjustments or extensions.

We also own two patent families directed to protease inhibitor fusion proteins including, for example, our INBRX-101 therapeutic candidate. Seven United States and 61 foreign patents (Australia, Canada, Mexico, Europe (validated in 39 countries), Hong Kong, India, Israel, Japan, South Korea, New Zealand, Russia, and Ukraine) were granted in these families. These patents are expected to expire in 2032 or 2035, absent any patent term extension. Additional patents in this patent family, if granted, are expected to expire in 2032 or 2035, depending upon their respective filing dates and absent any patent term adjustments or extensions.

Additionally, we own two patent families relating to the Celgene Licensed Intellectual Property that are licensed to Celgene. Two United States and 67 foreign patents (Australia, Colombia, China, Europe (validated in 39 countries), Eurasia, Hong Kong, Indonesia, Israel, Japan, South Korea, Mexico, Malaysia, Macao, New Zealand, Peru, Philippines, Russia, Singapore, South Africa and Ukraine) have been granted in these families and include claims directed to anti-CD47 monoclonal antibodies and/or methods of using the same to treat cancer. These patents are expected to expire in 2033, absent any patent term extension. Patent applications in these families are pending in multiple jurisdictions, including, for example, the United States, Australia, European Patent Organization, Canada, China, Japan, South Korea, and Russia. Additional patents in these patent families, if granted, are expected to expire in 2033, depending upon their respective filing dates and absent any patent term adjustments or extensions.

The following patents (including expected 20 year expiration dates) relate to our fusion protein technologies.

Jurisdiction	Patent Number	Expected Expiration Date	Type	Title
US	8,986,688	6/28/2032	Composition and method	WAP DOMAIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	9,914,765	6/28/2032	Composition	WAP DOMAIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Mexico	356433	6/28/2032	Composition and use	WAP DOMAIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	8,980,266	6/28/2032	Composition and method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	9,920,109	4/6/2034	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	10,730,929	6/28/2032	Composition	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	10,723,785	6/28/2032	Composition	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	10,400,029	6/28/2032	Composition	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
US	11,046,752	6/28/2032	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Australia	2012275287	6/28/2032	Composition, method and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Australia	2017279724	6/28/2032	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Australia	2015339507	10/27/2035	Composition, method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Australia	2019202904	6/28/2032	Composition, method and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF

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Canada	2839619	6/28/2032	Composition, method and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Europe (validated in AL, AT, BA, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB, GR, HR, HU, IE, IS, IT, LI, LT, LU, LV, MC, ME, MK, MT, NL, NO, PL, PT, RO, RS, SE, SK, SM, TR)	2726092	6/28/2032	Use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Hong Kong	1197544	6/28/2032	Use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
India	373030	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
India	366213	10/27/2035		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Israel	230209	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Japan	6674604	6/28/2032	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Japan	6737781	10/27/2035	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Korea	10-2084944	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Korea	10-2231139	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Mexico	356517	6/28/2032	Composition and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Mexico	381183	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
New Zealand	619023	6/28/2032	Composition and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Russia	2642310	6/28/2032	Composition and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Russia	2698655	6/28/2032	Method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Russia	2728861	6/28/2032	Composition and use	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Russia	2727452	6/28/2032	Composition and use, method	SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Russia	2746550	10/27/2035		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF
Ukraine	124083	6/28/2032		SERPIN FUSION POLYPEPTIDES AND METHODS OF USE THEREOF

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The following patents (including expected 20 year expiration date) relate to our single domain antibody technologies.

Jurisdiction	Patent Number	Expected Expiration Date	Type	Title
US	10,526,397	2/7/2036	Composition	NON-IMMUNOGENIC SINGLE DOMAIN ANTIBODIES
AU	2016209247	2/7/2036	Composition	NON-IMMUNOGENIC SINGLE DOMAIN ANTIBODIES

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The following patents (including expected 20 year expiration dates) relate to our multivalent therapeutic antibody technologies.

Jurisdiction	Patent Number	Expected Expiration Date	Type	Title
US	10,308,720	7/18/2036	Composition	MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
US	11,117,973	11/22/2036	Method	MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS AND METHODS OF TREATING NEOPLASMS
EP (Validated in: AL, AT, BA, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB, GR, HR, HU, IE, IS, IT, LI, LT, LU, LV, MC, ME, MK, MT, NL, NO, PL, PT, RO, RS, SE, SI, SK, SM, TR)	3322734	7/18/2036	Composition and use	MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
HK	1254433	7/18/2036	Composition and use	MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
JP	6807606	7/18/2036	Composition and method	MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
RU	2748620	7/18/2036		MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
SG	11201800223W	7/18/2036		MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
ZA	2018/00238	7/18/2036		MULTIVALENT AND MULTISPECIFIC DR5-BINDING FUSION PROTEINS
US	10,093,742	7/22/2036	Composition and method	MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
US	10,844,129	7/22/2036	Composition and method	MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
AU	2,016,297,249	7/22/2036	Composition, method and use	MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
JP	6,913,682	7/22/2036	Composition and use	MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
RU	2,753,439	7/22/2036		MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
TW	I745296	7/22/2036		MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
ZA	2018/00410	7/22/2036		MULTIVALENT AND MULTISPECIFIC GITR-BINDING FUSION PROTEINS
US	10,501,551	1/11/2037	Composition and method	MULTIVALENT AND MULTISPECIFIC 41BB-BINDING FUSION PROTEINS

The following patents (including expected 20 year expiration dates) relate to our CD47 antibody technologies.

Jurisdiction	Patent Number	Expected Expiration Date	Type	Title
US	9,045,541	2/6/2033	Composition	CD47 ANTIBODIES AND METHODS OF USE THEREOF
US	9,663,575	2/6/2033	Method	CD47 ANTIBODIES AND METHODS OF USE THEREOF

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Australia	2013217114	2/6/2033	Composition and method	CD47 ANTIBODIES AND METHODS OF USE THEREOF
China	ZL201380017900.0	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Colombia	14171778	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Eurasia (validated in Russia)	34778	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Europe (validated in AL, AT, BA, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB, GR, HR, HU, IE, IS, IT, LI, LU, LV, MC, ME, MK, MT, NL, NO, PL, PT, RO, RS, SE, SI, SK, SM, TR)	2812443	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Indonesia	IDP00005873	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Japan	6273212	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Korea	10-2100388	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Mexico	360772	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Malaysia	MY-169341-A	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
New Zealand	628314	2/6/2033	Composition and use	CD47 ANTIBODIES AND METHODS OF USE THEREOF
Philippines	1/2014/501758	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Singapore	11201404638S	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Ukraine	116772	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
South Africa	201405864	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Hong Kong	HK1205195	2/6/2033		CD47 ANTIBODIES AND METHODS OF USE THEREOF
Australia	2013377886	8/6/2033	Composition, method, and use	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Australia	2019200942	8/6/2033	Composition, method, and use	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
China	105101997	8/6/2033	Composition and use	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Eurasia	036963	8/6/2033		NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF

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Indonesia	IDP000058855	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Israel	240390	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Japan	6726238	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Korea	10-2170196	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Korea	10-2276974	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Macao	J/003573	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
New Zealand	710695	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
Peru	9897	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF
South Africa	2015/05745	8/6/2033	NON-PLATELET DEPLETING AND NON-RED BLOOD CELL DEPLETING CD47 ANTIBODIES AND METHODS OF USE THEREOF

We continually assess and refine our intellectual property strategy as we develop new technologies and therapeutic candidates. As our business evolves, we may, among other activities, file additional patent applications in pursuit of our intellectual property strategy, to adapt to competition or to seize potential opportunities.

The term of individual patents depends upon the laws of the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. However, the term of United States patents may be extended for delays incurred due to compliance with the FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office, or USPTO. For example, the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension for FDA-approved drugs of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our therapeutic candidates receive FDA approval, we expect to apply for patent term extensions on patents covering those therapeutic candidates. We intend to seek patent term extensions in any jurisdiction where these are available and where we also have a patent that may be eligible; however there is no guarantee that the applicable authorities, including the USPTO and FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.

We also rely on trade secrets to protect aspects of our technology and business not amenable to, or that we do not consider appropriate for, patent protection. We seek to protect this intellectual property, in part, by requiring our employees, consultants, outside scientific collaborators, sponsored researchers and other service providers and

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advisors to execute confidentiality agreements upon the commencement of employment or other relationship with us. In general, these agreements provide that confidential information concerning our business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements further provide that inventions and discoveries conceived or reduced to practice by the individual that are related to our business, or actual, or demonstrably anticipated, research or development, or made during normal working hours, on our premises or using our equipment, supplies, or proprietary information, are our exclusive property. In many cases our agreements with consultants, outside scientific collaborators, sponsored researchers and other service providers and advisors require them to assign, or grant us licenses to, inventions resulting from the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.

Further, we expect to rely on data exclusivity, market exclusivity, patent term adjustment and patent term extensions when available.

We seek trademark protection in the United States and in certain other jurisdictions where available and when we deem appropriate. We currently have a registration for “Inhibrx” in the United States. We intend to file applications for trademark registrations in connection with our therapeutic candidates in various jurisdictions, including the United States.

Competition

The biotechnology industry is characterized by rapid evolution of technologies, fierce competition and strong defense of intellectual property. While we believe that our platforms, technology, knowledge, experience, and scientific resources provide us with competitive advantages, we face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.

Any therapeutic candidates that we successfully develop and commercialize will compete with currently approved therapies and new therapies that may become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety and convenience of our therapeutics, the ease of use and effectiveness of any complementary diagnostics and/or companion diagnostics, and price and levels of reimbursement. Our primary competitors fall into the following groups:

•Companies developing novel therapeutics based on sdAb or alternative scaffold product candidates, including Alligator Bioscience AB, Camel-IDS N.V., Crescendo Biologics Ltd., GlaxoSmithKline plc, IGM Biosciences, Inc., Molecular Partners AG, Pieris Pharmaceuticals, Inc., Sanofi S.A. and VHsquared Ltd.;

•Antibody drug discovery companies that may compete with us in the search for novel therapeutic antibody targets, including Regeneron Pharmaceuticals, Inc., Adimab LLC, Genmab A/S, Macrogenics, Inc., Merus N.V., MorphoSys AG, Numab Therapeutics AG, Amgen, Inc., Xencor Inc., and Zymeworks Inc.;

•Companies developing therapeutics designed to treat AATD, including CSL Limited, Grifols, S.A., Kamada Ltd., Takeda Pharmaceutical Company Limited and Centessa Pharmaceuticals PLC; and

•Companies developing cytokine therapeutics, including Alkermes PLC, Altor BioScience, ImmunityBio, Inc., Medicenna Therapeutics Corp., Nektar Therapeutics, Neoleukin Therapeutics, Inc., Novartis AG, Pandion Therapeutics, Inc., Merck & Co., Philogen S.p.A., Roche Holding AG, Rubius Therapeutics, Inc., SOTIO Biotech, Synthekine, Inc., Sanofi S.A., Xencor, Inc.

Our competitors also include large pharmaceutical and biotechnology companies who may be developing therapeutic candidates with mechanisms similar to or targeting the same indications as our therapeutic candidates.

The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our therapeutic candidates. Our competitors also may obtain FDA or other marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

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Many of the companies against which we may compete have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals and marketing approved products than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These early stage and more established competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Government Regulation

Governmental authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, packaging, promotion, storage, advertising, distribution, marketing and export and import of products such as those we are developing. Our therapeutic candidates must be approved by the FDA through the Biologics License Application, or BLA, process before they may be legally marketed in the United States and will be subject to similar requirements in other countries prior to marketing in those countries. The process of obtaining marketing approvals in the U.S. and in foreign countries and jurisdictions, and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations, require the expenditure of substantial time and financial resources.

United States Government Regulation

In the United States, the FDA regulates biopharmaceutical products under the Federal Food, Drug, and Cosmetic Act and the Public Health Services Act, or PHSA, and implementing regulations. Failure to comply with the applicable U.S. requirements at any time during the product development or approval process, or after approval, may subject an applicant to administrative or judicial sanctions brought by the FDA and the Department of Justice, or DOJ, or other governmental entities, any of which could have a material adverse effect on us. These sanctions could include:

•refusal to approve pending applications;

•withdrawal of an approval;

•imposition of a clinical hold;

•warning or untitled letters;

•seizures or administrative detention of product;

•total or partial suspension of production or distribution; or

•injunctions, fines, disgorgement, or civil or criminal penalties.

BLA Approval Processes

The process required by the FDA before a therapeutic biologic may be marketed in the United States generally involves the following:

•completion of nonclinical laboratory tests, animal studies and formulation studies conducted according to good laboratory practices and other applicable regulations and guidance;

•submission to the FDA of an IND, which must become effective before human clinical trials may begin;

•performance of adequate and well-controlled human clinical trials according to good clinical practices, or GCPs, to establish the safety and efficacy of the therapeutic candidate for its intended use;

•submission to the FDA of a BLA;

•satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the therapeutic candidate is produced to assess readiness for commercial manufacturing and conformance to the manufacturing-related elements of the application, to conduct a data integrity audit, and to assess compliance with current Good Manufacturing Practices, or cGMPs, to assure that the facilities, methods and controls are adequate to preserve the therapeutic candidate’s identity, strength, quality and purity; and

•FDA review and approval of the BLA.

Preclinical Studies

Once a biopharmaceutical candidate is identified for development, it enters the preclinical or nonclinical testing stage. Nonclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as

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animal studies. An IND sponsor must submit the results of the nonclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. Additional nonclinical testing continues even after the IND is submitted. In addition to including the results of the nonclinical studies, the IND will also include a study protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the first phase lends itself to an efficacy determination. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the IND on clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. A clinical hold may occur at any time during the life of an IND and may affect one or more specific studies or all studies conducted under the IND.

Human Clinical Trials in Support of a BLA

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCPs. They must be conducted under protocols detailing the objectives of the trial, dosing procedures, research subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol, and any subsequent material amendment to the protocol, must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials must be submitted to the FDA annually. Sponsors also must report to the FDA serious and unexpected adverse reactions in a timely manner, such as any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator’s brochure or any findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the product or therapeutic candidate. An institutional review board, or IRB, for each institution participating in the clinical trial must review and approve the protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal representative, monitor the trial until completed and otherwise comply with IRB regulations. There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined.

Phase 1-The product or therapeutic candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and elimination. In the case of some therapeutic candidates for severe or life-threatening diseases, such as cancer, especially when the product or therapeutic candidate may be inherently too toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

Phase 2-Clinical trials are performed on a limited patient population intended to identify possible AEs and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase 3-Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These trials are intended to establish the overall risk-benefit ratio of the product and provide an adequate basis for product labeling.

A pivotal trial is a clinical trial that adequately meets regulatory agency requirements for the evaluation of a product or therapeutic candidate’s efficacy and safety such that it can be used to justify the approval of the product. Generally, pivotal trials are also Phase 3 trials but may be Phase 2 trials if the trial design provides a reliable assessment of clinical benefit, particularly in situations where there is an unmet medical need. Human clinical trials are inherently uncertain and Phase 1, Phase 2 and Phase 3 testing may not be successfully completed. The FDA or the sponsor may suspend a clinical trial at any time for a variety of reasons, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product or therapeutic candidate has been associated with unexpected serious harm to patients.

During the development of a new product or therapeutic candidate, sponsors are given opportunities to meet with the FDA at certain points; specifically, prior to the submission of an IND, at the end of Phase 2 and before a BLA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to

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share information about the data gathered to date and for the FDA to provide advice on the next phase of development. Sponsors typically use the meeting at the end of Phase 2 to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical trials that they believe will support the approval of the new therapeutic.

Post-approval trials, sometimes referred to as “Phase 4” clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, FDA may mandate the performance of “Phase 4” clinical trials.

Concurrent with clinical trials, sponsors usually complete additional animal safety studies, develop additional information about the chemistry and physical characteristics of the product or therapeutic candidate and finalize a process for manufacturing commercial quantities of the product or therapeutic candidate in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product or therapeutic candidate and the manufacturer must develop methods for testing the quality, purity and potency of the product or therapeutic candidate. To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHSA emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product or therapeutic candidate and, among other criteria, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the biological product or therapeutic candidate does not undergo unacceptable deterioration over its shelf life.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry maintained by the U.S. National Institutes of Health, or NIH. In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. Although sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in some cases for up to two years after the date of completion of the trial. Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government. The NIH’s Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and the government has recently begun enforcing those requirements against non-compliant clinical trial sponsors.

Marketing Application Submission and FDA Review

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with detailed descriptions of the product’s CMC, proposed labeling and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a significant user fee. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual program fee for prescription biological or drug products. Fee waivers or reductions are available in certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.

Under the goals and policies agreed to by the FDA under PDUFA, for original BLAs, the FDA has ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and the sponsor’s process to respond to such inquiries. This FDA review typically takes twelve months from the date the BLA is submitted to the FDA (for a standard review) and eight months from the date the BLA is

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submitted (for a “priority review”) because the FDA has approximately two months, or 60 days, after BLA submission to make a “filing” decision.

The FDA conducts a preliminary review of a submitted BLA within 60 days of receipt and informs the sponsor by the 74th day after the FDA’s receipt of the submission whether the application is substantially complete to permit a substantive review. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission, and may request additional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA. The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, potent, and/or effective for its intended use, whether it has an acceptable purity profile and whether the product is being manufactured in accordance with cGMP. The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers these recommendations carefully when making decisions.

The FDA likely will re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process. The FDA also may require the submission of a risk evaluation and mitigation strategy, or REMS, plan if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the biological product. The REMS plan could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS plan is needed, the sponsor of the BLA must submit a proposed REMS plan. The FDA will not approve a BLA without a REMS plan, if required.

Before approving a BLA, the FDA will typically inspect the facilities at which the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND trial requirements and GCP requirements and to assure the integrity of the clinical data submitted to the FDA. To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.

The approval process is lengthy and often difficult, and notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval and deny approval or may require additional clinical or other data and information. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. If the agency decides not to approve a BLA, the FDA will issue a complete response letter, or CRL, that describes all of the specific deficiencies in the BLA identified by the FDA. A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the CRL may include recommended actions that the applicant might take to place the application in a condition for approval. If a CRL is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter to the applicant. The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months depending on the type of information included. Even with the submission of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

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Even if a product receives marketing approval, the approval may be limited to specific indications and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a REMS plan, or otherwise limit the scope of any approval. In addition, the FDA may require post marketing clinical trials, sometimes referred to as “Phase 4” clinical trials, designed to further assess a biological product’s safety and effectiveness, and/or testing and surveillance programs to monitor the safety of approved products that have been commercialized. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Companion Diagnostics

The FDA issued a final guidance document in July 2014 addressing agency policy in relation to in vitro companion diagnostic tests. The guidance explains that for some drugs and therapeutic biologics, the use of a companion diagnostic test is essential for the safe and effective use of the product, such as when the use of a product is limited to a specific patient subpopulation that can be identified by using the test. According to the guidance, the FDA generally will not approve such a product if the companion diagnostic is not also approved or cleared for the appropriate indication, and accordingly the therapeutic product and the companion diagnostic should be developed and approved or cleared contemporaneously. However, the FDA may decide that it is appropriate to approve such a product without an approved or cleared in vitro companion diagnostic device when the drug or therapeutic biologic is intended to treat a serious or life-threatening condition for which no satisfactory alternative treatment exists and the FDA determines that the benefits from the use of a product with an unapproved or uncleared in vitro companion diagnostic device are so pronounced as to outweigh the risks from the lack of an approved or cleared in vitro companion diagnostic device. The FDA encourages sponsors considering developing a therapeutic product that requires a companion diagnostic to request a meeting with both relevant device and therapeutic product review divisions to ensure that the product development plan will produce sufficient data to establish the safety and effectiveness of both the therapeutic product and the companion diagnostic. Because the FDA’s policy on companion diagnostics is set forth only in guidance, this policy is subject to change and is not legally binding.

Fast Track, Breakthrough Therapy, and Priority Review Designations

The FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors. Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product. The FDA may also review sections of the BLA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections, and the sponsor pays any required user fees upon submission of the first section of the BLA. In addition, fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging in the clinical trial process.

In addition, with the enactment of the FDA Safety and Innovation Act, or FDASIA, in 2012, Congress created a new regulatory program for product and therapeutic candidates designated by the FDA as “breakthrough therapies” upon a request made by the IND sponsors. A breakthrough therapy is defined as a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs or biologics designated as breakthrough therapies are also eligible for accelerated approval of their respective marketing applications. The FDA must take certain actions with

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respect to breakthrough therapies, such as holding timely meetings with and providing advice to the product sponsor, intended to expedite the development and review of an application for approval of a breakthrough therapy.

Finally, the FDA may designate a product for priority review if it is a drug or biologic that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation. A priority review designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months for an original BLA from the date of filing.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Furthermore, fast track designation, breakthrough therapy designation and priority review do not change the standards for approval and may not ultimately expedite the development or approval process.

Accelerated Approval Pathway

In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval from the FDA and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a drug or biologic when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform post-marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures. Drugs and biologics granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval when the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug.

The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. For example, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large clinical trials to demonstrate a clinical or survival benefit.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a product or therapeutic candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during

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post-marketing studies, would allow the FDA to withdraw approval of the drug. All promotional materials for product and therapeutic candidates being considered and approved under the accelerated approval program are subject to prior review by the FDA. Lawmakers, FDA officials, and other stakeholders have recently been evaluating the accelerated approval program and have proposed potential reforms to improve certain aspects. In addition, over the past year, several oncology sponsors have voluntarily withdrawn specific indications for their drug products that were being marketed pursuant to accelerated approval, and the FDA’s Oncology Center of Excellence launched an initiative called Project Confirm, aimed at promoting transparency in the area of accelerated approvals for oncology indications. Scrutiny of the accelerated approval pathway is likely to continue and may lead to legislative and/or administrative changes in the future.

Patent Term Restoration and Reference Product Marketing Exclusivity for Biological Products

Depending upon the timing, duration and specifics of FDA approval of the use of our therapeutic candidates, some of our United States patents may be eligible for limited patent term extension under the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product or therapeutic candidate’s approval date. The patent term restoration period is generally one half of the time between the effective date of an IND and the submission date of a BLA, plus the time between the submission date of a BLA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved product or therapeutic candidate is eligible for the extension and the application for extension must be made prior to expiration of the patent. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the submission of the relevant BLA.

The Biologics Price Competition and Innovation Act, or the BPCIA, enacted in 2010, amended the PHSA to authorize the FDA to approve similar versions of innovative biologics such as ours, which are also known as “reference biological products.” The pathway authorized under the BPCIA allows FDA to approve, under an abbreviated application, a biological product that has been shown to be highly similar to a reference product notwithstanding minor differences in clinically inactive components; there also can be no clinically meaningful differences between the follow-on product and the reference product in terms of safety, purity and potency. Follow-on biological products approved for marketing using this pathway are commonly known as “biosimilars,” and companies seeking approval of biosimilar products must submit in their abbreviated BLAs data from analytical studies, animal studies and a clinical trial or trials sufficient to meet the statutory standard in order to obtain FDA approval. In addition, an interchangeable product is a biosimilar product that can be expected to produce the same clinical results as the reference product in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product without such alternation or switch. Upon licensure by the FDA, an interchangeable biosimilar may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product, although to date no such products have been approved for marketing in the United States. FDA approved the first interchangeable biosimilars, including an interchangeable monoclonal antibody biosimilar, in 2021.

The BPCIA bars the FDA from approving biosimilar applications for 12 years after a reference biological product receives initial marketing approval. FDA also cannot accept an application for a biosimilar product that is based on the reference biological product until four years after the date of first licensure of the reference product in question. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of a supplement for the reference product for a subsequent application filed by the same sponsor or manufacturer of the reference product for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength or for a modification to the structure of the biological product that does not result in a change in safety, purity or potency. Therefore, one

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must determine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity. Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor.

The BPCIA is complex and is still being interpreted and implemented by the FDA and by federal judges. In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation and legislative amendments. As a result, the ultimate impact, implementation and meaning of the BPCIA is subject to significant uncertainty.

Orphan Drug Designation and Orphan Product Exclusivity

Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to a therapeutic candidate intended to treat a rare disease or condition, which is generally a disease or condition that affects either (i) fewer than 200,000 individuals in the United States, or (ii) more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a product or therapeutic candidate for this type of disease or condition will be recovered from sales in the United States for that product or therapeutic candidate. Orphan Drug Designation must be requested before submitting a BLA. After the FDA grants Orphan Drug Designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan Drug Designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. INBRX-109 has been designated an orphan product by the FDA for the treatment of chondrosarcoma.

If a product or therapeutic candidate that has Orphan Drug Designation subsequently receives the first FDA approval for the disease for which it has such designation, the approved product is entitled to orphan product exclusivity, which means that the FDA may not approve any other marketing applications for the same drug for the same indication, except under limited circumstances (such as showing of clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety or providing a major contribution to patient care or in instances of drug supply issues), for seven years. Competitors, however, may still receive approval of either a different product for the same indication for which the orphan product has exclusivity or for the same product but for a different indication (which could then be used off-label in the orphan indication). Orphan product exclusivity, however, could also block the approval of one of our therapeutic candidates for seven years if a competitor obtains approval of the same drug as defined by the FDA, or if our therapeutic candidate is determined to be contained within a competitor’s approved drug for the same indication or disease. Further, if a drug designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity.

In addition, an orphan drug credit is available for qualifying costs incurred between the date the FDA designates a drug as an orphan drug and the date the FDA approves the drug.

Pediatric Exclusivity and Pediatric Use

Pediatric exclusivity is another type of non-patent marketing exclusivity available in the United States and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents. Under the Best Pharmaceuticals for Children Act, or BPCA, certain therapeutic candidates may obtain an additional six months of exclusivity if the sponsor submits information requested in writing by the FDA, referred to as a Written Request, relating to the use of the active moiety of the product or therapeutic candidate in children. The data do not need to show the product to be effective in the pediatric population studied; rather, the additional protection is granted if the pediatric clinical trial is deemed to have fairly responded to the FDA’s Written Request. Although the FDA may issue a Written Request for studies on either approved or unapproved indications, it may only do so where it determines that information relating to that use of a product or therapeutic candidate in a pediatric population, or part of the pediatric population, may produce health benefits in that population. The issuance of a Written Request does not require the sponsor to undertake the described trials. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

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In addition, the Pediatric Research Equity Act, or PREA, requires a sponsor to conduct pediatric trials for most therapeutic drugs and biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original new drug applications, BLAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. Sponsors must also submit Pediatric Study Plans, or PSPs, to the agency for review within sixty days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 clinical trial. The initial PSP must include an outline of the pediatric trial or trials that the sponsor plans to conduct, including trial objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric trials along with supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials or other clinical development programs.

The required assessment must assess the safety and effectiveness of the product or therapeutic candidate for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product and therapeutic candidate is safe and effective. The sponsor or FDA may request a deferral of pediatric trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin. The FDA is required to send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation, and the FDA publicly posts such PREA Non-Compliance letters and sponsor’s response. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although FDA has taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

Post-Approval Requirements

Following approval of a new product, the manufacturer and the approved biological product are subject to pervasive and continuing regulation by the FDA, including, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label use”) and limitations on industry-sponsored scientific and educational activities. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or a BLA supplement, which may require the applicant to develop additional data or conduct additional preclinical studies and clinical trials.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product or therapeutic reaches the market. Later discovery of previously unknown problems with a product or therapeutic candidate, including adverse events of unanticipated severity or frequency, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences of non-compliance include, among other things:

•restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•mandated modification of promotional materials or labeling and the issuance of corrective information;

•fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials;

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•refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product approvals;

•product seizure or detention, or refusal to permit the import or export of products;

•injunctions or the imposition of civil or criminal penalties; and

•consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs.

Any therapeutic candidate manufactured or distributed by us pursuant to FDA approvals will be subject to continuing regulation by the FDA, including, among other things:

•record-keeping requirements;

•reporting of adverse experiences with the therapeutic candidate;

•providing the FDA with updated safety and efficacy information;

•sampling and distribution requirements;

•notifying the FDA and gaining its approval of specified manufacturing or labeling changes; and

•complying with FDA promotion and advertising requirements, which include, among other things, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in-patient populations that are not described in the product’s approved labeling, limitations on industry-sponsored scientific and educational activities and requirements for promotional activities involving the internet.

FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMPs. The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products. Therapeutic manufacturers and other entities involved in the manufacture and distribution of approved therapeutic products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and some state agencies for compliance with cGMPs and other laws. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP requirements. In addition, changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the BLA applicant and any third-party manufacturers involved in producing the approved biological product. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of quality control and quality assurance.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or the PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. More recently, the Drug Supply Chain Security Act, or the DSCSA, was enacted with the aim of building an electronic system to identify and trace certain prescription drugs distributed in the United States, including most biological products. The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors, and dispensers over a 10‑year period that is expected to culminate in November 2023. From time to time, new legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. For example, the FDA released proposed regulations in February 2022 to amend the national standards for licensing of wholesale drug distributors by the states; establish new minimum standards for state licensing third-party logistics providers; and create a federal system for licensure for use in the absence of a State program, each of which is mandated by the DSCSA. It is impossible to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.

Regulation Outside of the United States

In addition to regulations in the United States, we will be subject to regulations of other jurisdictions governing any clinical trials and commercial sales and distribution of our therapeutic candidates. Whether or not we obtain FDA

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approval for a product, we must obtain approval by the comparable regulatory authorities of countries outside of the United States before we can commence clinical trials in such countries and approval of the regulators of such countries or economic areas, such as the European Union, before we may market products in those countries or areas. The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.

Under European Union regulatory systems, a company can consider applying for marketing authorization in several European Union member states by submitting its marketing authorization application(s) under a centralized, decentralized or mutual recognition procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The centralized procedure is compulsory for medicines derived from biotechnology, orphan medicinal products, or those medicines with an active substance not authorized in the European Union on or before May 20, 2004 intended to treat acquired immune deficiency syndrome, cancer, neurodegenerative disorders or diabetes and optional for those medicines containing a new active substance not authorized in the European Union on or before May 20, 2004, medicines which are highly innovative, or medicines to which the granting of a marketing authorization under the centralized procedure would be in the interest of patients at the European Union-level. The decentralized procedure provides for recognition by European Union national authorities of a first assessment performed by one of the member states. Under this procedure, an identical application for marketing authorization is submitted simultaneously to the national authorities of several European Union member states, one of them being chosen as the “Reference Member State,” and the remaining being the “Concerned Member States.” The Reference Member State must prepare and send drafts of an assessment report, summary of product characteristics and the labelling and package leaflet within 120 days after receipt of a valid marketing authorization application to the Concerned Member States, which must decide within 90 days whether to recognize approval. If any Concerned Member State does not recognize the marketing authorization on the grounds of potential serious risk to public health, the disputed points are eventually referred to the European Commission, whose decision is binding on all member states. The mutual recognition procedure is similar to the decentralized procedure except that a medicine must have already received a marketing authorization in at least one of the member states, and that member state acts as the Reference Member State.

As in the United States, we may apply for designation of a therapeutic candidate as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made.

Orphan drugs in the European Union enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product, the marketing authorization holder is unable to supply sufficient quantity of the medicinal product or the marketing authorization holder has given its consent.

The United Kingdom left the European Union on January 31, 2020 (commonly referred to as “Brexit”), with a transitional period that expired on December 31, 2020. The United Kingdom and the European Union entered into a trade agreement known as the Trade and Cooperation Agreement, which went into effect on January 1, 2021. It remains to be seen how Brexit and the Trade and Cooperation Agreement will impact regulatory requirements for product candidates and products in the United Kingdom. We are currently evaluating the potential impacts on our business of the Trade and Cooperation Agreement and guidance issued to date by the United Kingdom’s Medicines and Healthcare products Regulatory Agency, or MHRA, regarding the requirements for licensing and marketing therapeutic drugs and biologics in the United Kingdom.

Since the regulatory framework in the United Kingdom covering the quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from European Union directives and regulations, Brexit could materially impact the future regulatory regime as it applies to medicinal products and the approval of product candidates in the United Kingdom.

Coverage, Pricing and Reimbursement

Sales of our products will depend, in part, on the extent to which our products will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. There may be significant delays in obtaining coverage and reimbursement for approved products, and coverage may be more

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limited than the purposes for which the product is approved by the FDA or regulatory authorities in other countries. It is time consuming and expensive to seek reimbursement from third-party payors. Moreover, eligibility for reimbursement does not imply that any product will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Payment rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States, or U.S.. In the U.S., third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have their own methods and approval process apart from Medicare coverage and reimbursement determinations. Accordingly, one third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

Additionally, the containment of healthcare costs has become a priority of federal and state governments and the prices of therapeutics have been a focus in this effort. The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic and biosimilar products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis. In addition, companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to obtaining coverage and reimbursement for the pharmaceutical or biological products apply to companion diagnostics.

Moreover, in some foreign countries, the proposed pricing for a product and therapeutic candidate must be approved before it may be lawfully marketed. The requirements governing therapeutic pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our therapeutic candidates. Historically, therapeutic candidates launched in the European Union do not follow price structures of the United States and generally tend to be significantly lower.

Healthcare Reform

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product and therapeutic candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product and therapeutic candidates that obtain marketing approval. The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of our product and therapeutic candidates. For example, in December 2016, the 21st Century Cures Act, or Cures Act, was signed into law. The Cures Act, among other things, is intended to modernize the regulation of drugs and devices and to spur innovation, but its ultimate implementation is uncertain. In addition, in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug and device provisions that build on the Cures Act. Furthermore, the next FDA reauthorization package is currently being negotiated and is due to be finalized by Congress in 2022, while several other FDA-related changes are also being proposed in Congress, including within a “Cures 2.0” bill that is likely to have bipartisan support. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing

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approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations. Moreover, among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, was enacted in March 2010 and has had a significant impact on the health care industry in the U.S. The ACA expanded coverage for the uninsured while at the same time containing overall healthcare costs. It also included the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. With regard to biopharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program. As another example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive healthcare provisions and amendments to existing laws, including a requirement that all manufacturers of drugs and biological products covered under Medicare Part B report the product’s average sales price, or ASP, to the United States Department of Health and Human Services, or HHS, beginning on January 1, 2022, subject to enforcement via civil money penalties.

Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA, and as a result certain sections of the ACA have not been fully implemented or have been effectively repealed through Executive Orders and/or executive agency decisions. However, following several years of litigation in the federal courts, in June 2021, the U.S. Supreme Court upheld the ACA when it dismissed a legal challenge to the ACA’s constitutionality. Further legislative and regulatory changes under the ACA remain possible, although the Biden Administration has signaled that it plans to build on the ACA and expand the number of people who are eligible for health insurance subsidies under it. It is unknown what form any such changes or any law would take, and how or whether it may affect the biopharmaceutical industry as a whole or our business in the future. We expect that changes or additions to the ACA, the Medicare and Medicaid programs, such as changes allowing the federal government to directly negotiate drug prices, and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the health care industry in the United States.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA that affect health care expenditures. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and will remain in effect through 2030 unless additional Congressional action is taken. The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which was signed into law on March 27, 2020 and was designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030, in order to offset the added expense of the 2020 cancellation. The suspension was subsequently extended through March 31, 2022, with a reduction of the suspension to 1% sequester through June 30, 2022.

As another example, in December 2019, President Trump signed the Further Consolidated Appropriations Act for 2020 into law, or P.L. 116-94, that includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019, or the CREATES Act. The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to deny generic and biosimilar product developers access to samples of brand products. Because generic and biosimilar product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic and biosimilar products. To remedy this concern, the CREATES Act establishes a private cause of action that permits a generic or biosimilar product developer to sue the brand manufacturer to compel it to furnish the necessary samples on “commercially reasonable, market-based terms.” Whether and how generic and biosimilar product developments will use this new pathway, as

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well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on our future commercial products are unknown.

Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. The HHS has solicited feedback on some of various measures intended to lower drug prices and reduce the out of pocket costs of drugs and implemented others under its existing authority. For example, in May 2019, HHS issued a final rule to allow Medicare Advantage plans the option to use step therapy for Part B drugs beginning January 1, 2020. This final rule codified an HHS policy change that was effective January 1, 2019. As another example, in 2020, the FDA finalized a rulemaking to establish a system whereby state governmental entities could lawfully import and distribute prescription drugs sourced from Canada. More recently, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and health care insurance industries. Among other things, the executive order directed the FDA to work towards implementing a system for importing drugs from Canada (following on the Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020). The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry. The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate PBMs and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. We expect that additional state and federal health care reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services.

Other Healthcare Laws

Our current and future business operations are subject to healthcare regulation and enforcement by the federal government and the states and foreign governments where we research, and, if approved, market, sell and distribute our therapeutic candidates. These laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security, physician sunshine and drug pricing transparency laws and regulations such as:

•The federal Anti-Kickback Statute prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or paying remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs. The federal Anti-Kickback Statute is broadly interpreted and aggressively enforced with the result that beneficial commercial arrangements can be penalized in the healthcare industry. In the past, the government has enforced the federal Anti-Kickback Statute to reach large settlements with healthcare companies based on a variety of arrangements, including sham consulting and other financial arrangements with physicians. Penalties for violating the federal Anti-Kickback Statute include imprisonment for up to 10 years, fines of up to $100,000 per violation and possible exclusion from federal healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim

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including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

•The federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, prohibit, among other things, knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to the U.S. government, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the U.S. government, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. government. Actions under these laws may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. The federal government uses these laws, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical and biotechnology companies throughout the U.S., for example, in connection with the promotion of products for unapproved uses and other allegedly unlawful sales and marketing practices. If an entity is found to have violated the False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory and substantial civil penalties;

•The U.S. federal Health Insurance Portability and Accountability Act of 1996 and its accompanying regulations, or HIPAA, created new federal, civil and criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

•The Physician Payments Sunshine Act, enacted as part of the ACA, among other things, imposes reporting requirements on manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to HHS information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors and certain advanced non-physician health care practitioners), teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. The law carries penalties of up to $1.15 million per year for violations, depending on the circumstances, and payments reported also have the potential to draw scrutiny on payments and relationships with with physicians, which may have implications under the Anti-Kickback Statute and other healthcare laws;

•Analogous state laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information; state and local laws which require the registration of pharmaceutical sales representatives; and state laws and non-United States laws and regulations (particularly European Union laws regarding personal data relating to individuals based in Europe) that govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways, thus complicating compliance efforts.

Moreover, in November 2020, HHS finalized significant changes to the regulations implementing the Anti-Kickback Statute and the civil monetary penalty rules regarding beneficiary inducements, with the goal of offering the healthcare industry more flexibility and reducing the regulatory burden associated with those fraud and abuse laws, particularly with respect to value-based arrangements among industry participants.

Ensuring that our current and future business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any such requirements, we may be subject to significant civil, criminal and administrative penalties, including

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monetary damages, fines, disgorgement, imprisonment, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, reputational harm, diminished profits and future earnings, additional reporting requirements if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with any of these laws, and the curtailment or restructuring of our operations.

U.S. and European Data Security and Data Privacy Laws

HIPAA, as well as a number of other federal and state privacy-related laws, extensively regulate the use and disclosure of individually identifiable health information, known as “protected health information” or “PHI”.

HIPAA applies to health plans, healthcare providers who engage in certain standard healthcare transactions electronically, such as electronic billing, and healthcare clearinghouses, all of which are referred to as “covered entities” under HIPAA. State imposed health information privacy and security laws typically apply based on licensure, for example, licensed providers or licensed entities are limited in their ability to use and share health information.

Additionally, all states have enacted legislation protecting the privacy and security of “personal information” such as identifiable financial or health information, social security number and credit card information. These laws overlap and apply simultaneously with federal privacy and security requirements and regulated entities must comply with all of them. The California Consumer Privacy Act, or CCPA, that went into effect January 1, 2020, is one of the most restrictive state privacy laws, protecting a wide variety of personal information and granting significant rights to California residents with respect to their personal information. Regulations under CCPA have been modified several times. Additionally, a new privacy law, the California Privacy Rights Act, or CPRA, was approved by California voters in the election of November 3, 2020. CPRA will modify CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses stemming from efforts to comply, and additional potential for harm and liability for failure to comply. Other states in the U.S. are considering privacy laws similar to CCPA. In dealing with health information for the development of our technology or for commercial purposes, we will be indirectly affected by HIPAA and state-imposed health information privacy and security laws because these laws regulate the ability of our potential customers and research collaborators to share health information with us. Additionally, we must identify and comply with all applicable state laws for the protection of personal information with respect to employee information or other personal information that the company collects. See Part I, Item 1A “Risk Factors- We face regulation and potential liability related to the privacy, data protection and information security which may require significant resources and may adversely affect our business, operations and financial performance.”

In the European Union, increasingly stringent data protection and privacy rules that have and will continue to have substantial impact on the use of personal and patient data across the healthcare industry became stronger in May 2018. The EU General Data Protection Regulation, or GDPR, applies across the European Union and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance. The GDPR fine framework can be up to 20 million euros, or up to 4% of the company’s total global turnover of the preceding fiscal year, whichever is higher. The GDPR sets out a number of requirements that must be complied with when handling the personal data of such European Union based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g., access requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; and the new mandatory data breach regime. In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify an individual are all classified as “special category” data under the GDPR and are afforded greater protection and require additional compliance obligations. Noncompliance could result in the imposition of fines, penalties, or orders to stop noncompliant activities. We may be subject to GDPR if we undertake operations in the EU, offer products or services to individuals in the EU or monitor the behavior of individuals within the EU.

We could also be subject to evolving European Union laws on data export, for transfers of data outside the European Union to us, group companies or third parties. The GDPR only permits exports of data outside the European Union

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to jurisdictions that ensure an adequate level of data protection. The United States has not been deemed to offer an adequate level of protection, so in order for us to transfer personal data from the EU to the United States, we must identify a legal basis for data transfer (e.g., the European Union Commission approved Standard Contractual Clauses). On July 16, 2020, the Court of Justice of the European Union or the CJEU, issued a landmark opinion in the case Maximilian Schrems vs. Facebook (Case C-311/18), called Schrems II. This decision (a) calls into question commonly relied upon data transfer mechanisms as between the European Union member states and the United States (such as the Standard Contractual Clauses) and (b) invalidates the EU-U.S. Privacy Shield on which many companies had relied as an acceptable mechanism for transferring such data from the EU to the United States. The CJEU is the highest court in Europe and the Schrems II decision heightens the burden on data importers to assess U.S. national security laws on their business and future actions of European Union data protection authorities are difficult to predict.

Further, the United Kingdom’s decision to leave the European Union, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom. In particular, while the Data Protection Act of 2018 that “implements” and complements the GDPR achieved Royal Assent on May 23, 2018 and is now effective in the United Kingdom, it is still unclear whether transfer of data from the European Economic Area to the United Kingdom will remain lawful under GDPR.

Other Laws and Regulations

Our present business is, and our future business may be, subject to regulation under the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the National Environmental Policy Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, national restrictions, and other current and potential future local, state, federal, and foreign regulations. See Part I, Item 1A “Risk Factors- If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.”

Manufacturing

We do not own or operate manufacturing facilities for the production of any of our therapeutic candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We presently have relationships with suppliers for the manufacture of supplies for all of our required raw materials, antibodies and other biologics for our preclinical research, clinical trials, and if and when applicable, commercialization. We currently employ internal resources to manage our manufacturing relationships with these third parties.

Human Capital Resources

Our employees are a key factor in our ability to achieve our mission to discover and develop effective biologic therapeutics for people with life-threatening conditions. We believe that our future success depends on our continued ability to identify, recruit, retain, and incentivize our management team and our clinical, scientific, and other employees. Our ability to do so depends on factors including our Company culture, compensation and benefits, growth and development opportunities, and prioritization of employee safety.

Employee Profile

As of December 31, 2021, we had 112 employees, 106 of whom were full-time, 97 of whom were engaged in research and development activity, and 25 with a Ph.D. or M.D. None of our employees are represented by a labor union and we believe we maintain good relations with our employees.

Employee Conduct & Ethics

Inhibrx adopted and regularly reviews corporate policies, including a Code of Conduct and Ethics and Whistleblower Policy, which apply to all of our employees. All employees attend a mandatory public company training session and are required to abide by, review and confirm compliance to the Company’s Corporate Code of Conduct and Ethics and Whistleblower Policy, as well as our Insider Trading Policy governing trading by Company personnel in the Company’s securities. We have established a Whistleblower reporting hotline to enable our employees to anonymously report any suspected violations of these policies. In addition, the Company requires employees to complete Anti-Harassment Training, with employees who work in a management capacity required to complete additional trainings in Harassment Prevention and Diversity, Equity and Inclusion.

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Employee Compensation and Benefits

Our compensation programs are designed to reward and support our employees in order to continue to attract and retain top talent. Our compensation includes:

•Employee base salaries that are competitive and consistent with employee positions, skill levels, experience, and knowledge;

•Stock-based compensation awards which help to align the interests of our stockholders with those of our employees;

•Bonus award plans at the senior management level and discretionary awards for other key employees;

•Retirement savings options and matching contributions;

•Fully covered healthcare benefits for all full-time employees and their dependents;

•Unlimited vacation benefit for all full-time employees; and

•Parental leave and other leave options available to all employees.

Employee Growth and Development

Inhibrx is committed to fostering and growing talent within the biotechnology and life sciences space. We provide internship opportunities for students interested in biotechnology and science within our research and development departments. Many of our interns have continued on to join the Company in a full-time position after graduation. Our hiring process is transparent and we are an equal opportunity employer. Many of our employees hold Ph.D.s or M.D.s; however, the Company equally commits resources to advancing all of our employees with a range of educational backgrounds. We offer tuition reimbursement aimed at growth and career development, as well as the opportunity for employees to attend relevant conferences and symposiums. In addition, we offer in-house coaching opportunities to refine or develop professional skills as our employees become managers and plan their career growth.

Employee Wellness, Health, and Safety

We are strongly committed to the health and safety of our employees and strive to maintain the highest possible level of safety in our workplace. We require annual workplace safety training to reinforce workplace safety procedures that may be useful in the event of emergency situations and to assist our employees in helping to prevent workplace accidents. Our Environmental Health and Safety Committee, which is comprised of numerous cross-departmental members, meets regularly to review workplace safety and adherence to safety policies.

In response to the COVID-19 pandemic, we created a COVID-19 Task Force, which, since March 2020, has been continuously implementing changes in our business to protect our employees, support appropriate health and safety protocols, and comply with government regulations. These measures include implementing a policy for employees to work from home to the extent practicable, increased physical distancing in workspaces, and regular testing or vaccination requirements. For our essential employees who remain onsite, we provide personal protective equipment and enhanced cleaning protocols. We have implemented a policy and protocols to address COVID-19 cases and potential exposure. As the COVID-19 pandemic continues to evolve, we adjust and tailor our approach based on applicable regulations, public health guidance, and local community case rates.

Corporate Information

We were incorporated under the laws of the State of Delaware on November 17, 2017 under the name Tenium Therapeutics, Inc. In April 2018, we changed our name to Inhibrx, Inc.

Available Information

Our internet address is www.inhibrx.com, to which we regularly post copies of our press releases as well as additional information about us. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are available to you free of charge through the Investors section on our website as soon as reasonably practicable after such materials have been electronically filed with, or furnished to, the SEC. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We include our web site address in this Annual Report only as an inactive textual reference. Information contained in our website does not constitute a part of this report or our other filings with the SEC.

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Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including our consolidated financial statements and related notes, before investing in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. If any of the following risks occur, our business, operating results, financial condition, and prospects could be materially harmed. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Summary Risk Factors

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the section of this Annual Report titled “Risk Factors”. These risks include, among others, the following:

Risks Related to Our Financial Condition and Need for Additional Capital

•We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate product revenue or become profitable, or if we achieve profitability, we may not be able to sustain it.

•Biotechnology product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenue from product sales and may never be profitable.

•We will need substantial additional funding in order to complete the development and commercialization of our therapeutic candidates.

Risks Related to the Development, Clinical Testing and Commercialization of Our Therapeutic Candidates

•Our therapeutic candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their commercial viability, and the results of any preclinical studies or clinical trials may not be predictive of the results of later clinical trials. If we, or our collaboration partners, are unable to advance our therapeutic candidates through clinical development, obtain marketing approval and ultimately commercialize our therapeutic candidates, or experience significant delays in doing so, our business will be materially harmed.

•We rely on third parties to conduct all of our clinical trials and certain of our preclinical studies and for the manufacture of our therapeutic candidates and we intend to continue to do so. If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations and prospects.

Risks Related to Our Organization and Operations

•We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than the therapeutic candidates we develop, our commercial opportunities will be negatively impacted.

•Our clinical trials, marketing approval prospects, access to capital, performance of third parties and our business may be adversely affected by circumstances and uncertainties related to the COVID-19 pandemic.

Risks Related to Intellectual Property

•If we are not able to obtain and enforce patent protection for our technologies or therapeutic candidates, development and commercialization of our therapeutic candidates may be adversely affected.

Risks Related to Government Regulation

•The marketing approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our therapeutic candidates, our business will be substantially harmed.

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Risks Related to Ownership of Our Common Stock

•We do not know whether an active, liquid and orderly trading market will continue for our common stock and as a result it may be difficult for you to sell your shares of our common stock.

•We expect that our stock price may fluctuate significantly and future sales of our common stock in the public market could cause our stock price to fall.

•Our executive officers, directors and holders of more than 5% of our capital stock own a significant percentage of our stock and will be able to exercise significant control over matters subject to stockholder approval.

•Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Risks Related to Our Financial Condition and Need for Additional Capital

We have a limited operating history, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate product revenue or become profitable, or if we achieve profitability, we may not be able to sustain it.

We are a clinical-stage biotechnology company. To date, we have financed our operations through equity and debt financings, license and milestone revenue and grants. We have incurred significant recurring operating losses since our inception. Our net loss for the years ended December 31, 2021 and 2020 was $81.8 million and $76.1 million, respectively. As of December 31, 2021, we had an accumulated deficit of $227.1 million. We expect to incur additional losses in future years as we execute our plan to continue our discovery, research and development activities, including the manufacturing of and ongoing and planned preclinical and clinical development and commercialization of our therapeutic candidates, and as we incur the additional costs of operating as a public company. We are unable to predict the extent of any future losses or when we will become profitable, if ever. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

Biotechnology product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenue from product sales and may never be profitable.

We have devoted substantially all of our financial resources and efforts to developing our therapeutic candidates, identifying potential therapeutic candidates and conducting preclinical studies and clinical trials. We are still in the early stages of developing our therapeutic candidates, and we have not yet demonstrated an ability to successfully conduct or complete any clinical trials, including large-scale, pivotal clinical trials, obtain marketing approval, manufacture a commercial scale product or arrange for a third party to do so on our behalf or conduct sales and marketing activities necessary for successful product commercialization. Consequently, we have no meaningful operations upon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had more experience developing therapeutic candidates. We previously entered into the Chiesi Option Agreement and the Celgene Agreement. Our ability to generate revenue and achieve profitability, including any revenue we may receive pursuant to the Chiesi Option Agreement or the Celgene Agreement, depends in large part on our ability, alone or with license partners, to achieve milestones and to successfully complete the development of, obtain the necessary marketing approvals for, and commercialize, our therapeutic candidates. For example, while we believe it is possible Celgene may incorporate the Celgene Licensed Intellectual Property into a multispecific format with another antibody for future development pursuant to the Celgene Agreement, this may not occur. We believe it is unlikely we will receive additional milestone payments pursuant to the Celgene Agreement unless Celgene develops a therapeutic candidate under the Celgene Agreement and advances that therapeutic candidate beyond Phase 1 clinical trials. Even if we achieve development or commercial milestones, generate product royalties or generate product sales, including any milestones and royalties we may be eligible to receive pursuant to the Celgene Agreement or the Chiesi Option Agreement, we may never achieve or sustain profitability on a quarterly or annual basis. We do not anticipate generating revenue from sales of products for the foreseeable

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future. Our ability to generate future revenue from product sales depends heavily on our and our collaborators’ success in:

•completing clinical trials through all phases of clinical development of our current therapeutic candidates, including INBRX-101, INBRX-109, INBRX-106, and INBRX-105;

•advancing preclinical therapeutic candidates into clinical development;

•seeking and obtaining marketing approvals for our therapeutic candidates that successfully complete clinical trials;

•obtaining satisfactory acceptance, formulary placement coverage and adequate reimbursement for our approved products from third-party payors, including private health insurers, managed care providers and governmental payor programs, including Medicare and Medicaid;

•launching and commercializing products for which we obtain marketing approval, with a collaborator or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure;

•establishing and maintaining supply and manufacturing relationships with third parties;

•obtaining market acceptance of any approved products by physicians, patients, third-party payors and the medical community;

•maintaining, protecting, expanding and enforcing our intellectual property portfolio;

•implementing additional internal systems and infrastructure, as needed; and

•attracting, hiring and retaining qualified personnel.

Because of the numerous risks and uncertainties associated with biological product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the FDA, the EMA, or other comparable foreign authorities to perform preclinical studies or clinical trials in addition to those we currently anticipate, or if there are any delays in completing our clinical trials or the development of any of our therapeutic candidates, our expenses could increase and revenue could be further delayed.

We expect we will need to raise substantial additional funds to advance development of our therapeutic candidates, and we cannot guarantee this additional funding will be available on acceptable terms or at all. Failure to obtain this funding when needed may force us to delay, limit or terminate our development efforts and, if any of our therapeutic candidates are approved, our commercialization efforts.

As of December 31, 2021, we had $131.3 million in cash. We expect our expenses to increase in future years as we execute our plan to continue our discovery, research and development activities, including the ongoing and planned preclinical and clinical development and commercialization of our therapeutic candidates. Identifying potential therapeutic candidates and conducting preclinical testing and clinical trials are time consuming, expensive and uncertain processes that take years to complete, and we, or our collaborators, may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our therapeutic candidates, if approved, may not achieve commercial success.

We believe that our existing cash and cash equivalents will be sufficient to fund our planned operations through at least the 12 month period following the date of this Annual Report. However, changing circumstances or inaccurate estimates by us may cause us to use capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. For example, our current and our planned preclinical studies and clinical trials for our current therapeutic candidates or other therapeutic candidates we may seek to develop may encounter technical, enrollment or other issues that could cause our development costs to increase more than we expect, or we could expand our clinical trials to additional indications which could increase clinical trial expenses. Because successful development of our therapeutic candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our therapeutic candidates. Our ability to raise additional funds will depend on financial, economic and market conditions and other factors, over which we may have no or limited control. In addition, our ability to obtain future funding when needed through equity financings, debt financings or strategic collaborations may be particularly challenging in light of the uncertainties and circumstances regarding the COVID-19 pandemic (as defined below).

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If adequate funds are not available on commercially acceptable terms when needed, we may be forced to delay, reduce or terminate the development or commercialization of all or part of our research programs or clinical therapeutic candidates, or we may be unable to take advantage of future business opportunities. In addition, any additional capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current and future therapeutic candidates.

Raising additional capital by issuing equity or debt securities may cause dilution to existing stockholders, and raising funds through lending and licensing or collaboration agreements may restrict our operations or require us to relinquish proprietary rights.

Until such time as we can generate substantial revenue from product sales, if ever, we expect to finance our cash needs through a combination of equity and debt financings, strategic collaborations and license and development agreements. We do not have any committed external source of funds. To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Equity and debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares, making investments, incurring additional debt, making capital expenditures or declaring dividends.

The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants therein, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business. Additionally, during 2020, 2021, and 2022, we borrowed a total of $110.0 million in four separate tranches from Oxford Finance, LLC, or Oxford, with three additional future tranches with a total of $90.0 million, under our loan and security agreement and its amendments, which we refer to collectively as the Amended 2020 Loan Agreement, which, as further described below, also has covenants restricting our ability to declare dividends or incur additional indebtedness.

If we raise additional capital through collaborations, strategic alliances or third-party licensing agreements, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or therapeutics candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital through equity or debt financings when needed (including if we are unable to do so as a result of the COVID-19 pandemic), we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market therapeutic candidates that we would otherwise develop and market ourselves.

The expected phase out of LIBOR could impact the interest rates paid on our variable rate indebtedness and cause our interest expense to increase.

Under the Amended 2020 Loan Agreement, our term loans bear interest at a variable rate based on LIBOR. In July 2017, the United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021, or the FCA Announcement. In November 2020, the Intercontinental Exchange announced that it intends to cease publication of certain LIBOR settings by the end of 2021 while continuing to publish overnight and one-, three-, six-, and twelve-month U.S. dollar LIBOR rates through June 30, 2023. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing LIBOR with the Secured Overnight Financing Rate, or SOFR, a new index calculated based on transactions in the market for short-term treasury securities.

The Amended 2020 Loan Agreement includes language to determine a replacement rate for LIBOR, if necessary. We are evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, however, we are not able to predict whether LIBOR will cease to be available or whether SOFR will become a widely accepted benchmark in place of LIBOR. Although it is not possible to predict the effect the FCA Announcement, any discontinuation, modification or other reforms to LIBOR or the establishment of alternative reference rates such as SOFR may have on LIBOR, we do not expect the effect to have a material impact on our interest expense.

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Risks Related to the Development, Clinical Testing and Commercialization of Our Therapeutic Candidates

Our therapeutic candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their commercial viability. If we, or our collaborators, are unable to advance our therapeutic candidates through clinical development, obtain marketing approval and ultimately commercialize our therapeutic candidates, or experience significant delays in doing so, our business will be materially harmed.

We are early in our development efforts, with only four therapeutic candidates currently in clinical trials (INBRX-101, INBRX-109, INBRX-106, and INBRX-105). We have no products on the market and our ability to achieve and sustain profitability depends on obtaining marketing approvals for and successfully commercializing our therapeutic candidates, either alone or with our collaborators. Before obtaining marketing approval for the commercial distribution of our therapeutic candidates, we, or our collaborators, must conduct extensive preclinical tests and clinical trials to demonstrate sufficient safety and efficacy of our therapeutic candidates in patients. Failure can occur at any time during the clinical trial process and our future clinical trial results may not be successful. As a result, we may not have the financial resources to continue development of, or to modify existing or to enter into new license or collaboration for, a therapeutic candidate if we experience any issues that delay or prevent marketing approval of, or our ability to commercialize, our therapeutic candidates, including:

•negative or inconclusive results from our clinical trials, the clinical trials of our collaborators or the clinical trials of others for therapeutic candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program;

•therapeutic-related side effects experienced by participants in our clinical trials, the clinical trials of our collaborators or by individuals using drugs or therapeutic biologics similar to our therapeutic candidates;

•delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;

•conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials;

•delays in enrolling research subjects or high drop-out rates of research subjects enrolled in clinical trials;

•delays or difficulties in our clinical trials due to quarantines or other restrictions resulting from the COVID-19 pandemic, including further delays or suspensions in enrollment in our Phase 1 clinical trial for INBRX-101;

•unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or the manufacturing location(s) for a therapeutic candidate;

•inadequate supply or quality of therapeutic candidate clinical material or other raw materials or supplies necessary for the conduct of our clinical trials or the clinical trials of our collaborators;

•delay in the development or approval of companion diagnostic tests for our therapeutic candidates;

•failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;

•delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight for human clinical testing generally or with respect to our technology in particular; or

•varying interpretations of data by the FDA and similar foreign regulatory agencies.

The therapeutic candidates we or our collaborators pursue may not demonstrate the necessary safety or efficacy requirements for marketing approval. Further, a clinical trial may be suspended or terminated by us, our collaborators, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations, administrative actions or lack of adequate funding to continue the clinical trial. Clinical holds may be placed prior to a clinical trial even beginning, in order to address potential safety and risk concerns of regulatory authorities, and partial or complete clinical holds can be imposed at any time during a trial. Furthermore, while we perform certain similar functions internally, we expect to rely on

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contract research organizations, or CROs, and clinical trial sites to ensure proper and timely conduct of our clinical trials and while we expect to enter into and have entered into agreements governing those CROs’ committed activities, we have limited influence over their actual performance.

If we or our collaborators experience delays in the completion of, or termination of, any clinical trial of our therapeutic candidates, the commercial prospects of our therapeutic candidates may be harmed, and our ability to generate product revenue or receive royalties from any of these therapeutic candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenue. If we were to cancel the development of any of our therapeutic candidates, we may still be required to pay certain non-cancellable commitments to our CROs under the terms of our various CRO contracts. Our approach to protein engineering is novel and unproven, and as such, the cost, time needed to develop, and likelihood of success of our therapeutic candidates may be more uncertain than if we employed more established drug development approaches. Any of these occurrences may materially and adversely affect our business, financial condition, results of operations and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our therapeutic candidates.

The results of preclinical studies and early stage clinical trials of our therapeutic candidates may not be predictive of the results of later stage clinical trials. Initial results or observations in our ongoing clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials.

Success in preclinical studies and early clinical trials does not ensure that later and pivotal clinical trials will generate the same results, or otherwise provide adequate data to demonstrate the safety and efficacy of a therapeutic candidate. Frequently, therapeutic candidates that have shown promising results in preclinical studies or early clinical trials have subsequently suffered significant setbacks in later or pivotal clinical trials. The initiation of registration-enabling trials for INBRX-109, or for any of our other therapeutic candidates, is and would be predicated on positive Phase 1 trial results and acceptance of our IND amendment by the FDA. Our therapeutic candidates in clinical trials, including INBRX-101, INBRX-109, INBRX-106, and INBRX-105, may ultimately fail to show the desired safety and efficacy in clinical trials despite having progressed through preclinical studies and despite any initial observations of single agent activity, stable disease or partial responses. There can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development, including development in registration-enabling trials, of any of our therapeutic candidates. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies or trials, and any of these setbacks in our clinical development could have a material adverse effect on our business and operating results.

Our therapeutic candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

Undesirable side effects caused by our therapeutic candidates could cause us, our collaborators or regulatory authorities, to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or other regulatory authorities. Results of our clinical trials or the clinical trials of our collaborators could reveal a high and unacceptable severity of adverse side effects and it is possible that patients enrolled in these clinical trials could respond in unexpected ways. For instance, INBRX-109, INBRX-106, and INBRX-105 are all therapeutic candidates targeting oncology indications that are clinically evaluated in very sick populations, and INBRX-101 is a therapeutic candidate focused on AATD, a rare disease with a relatively small patient population. It may be difficult to establish safety and efficacy in these types of patient populations. Further, we intend to develop certain of our therapeutic candidates in combination with one or more cancer therapies. This combination may have additional side effects that were not present in preclinical studies or clinical trials of our therapeutic candidates conducted as a monotherapy or in combination with other cancer therapies. The uncertainty resulting from the use of our therapeutic candidates in combination with other cancer therapies may make it difficult to accurately predict side effects in future clinical trials.

If our clinical trials or the clinical trials of our collaborators reveal adverse side effects, our trials or the clinical trials of our collaborators could be suspended or terminated and the FDA or comparable foreign regulatory authorities

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could impose a clinical hold, order us to cease further development of or deny approval of our therapeutic candidates for any or all targeted indications. Such side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Further, clinical trials by their nature utilize a sample of the potential patient population. Rare and severe side effects of our therapeutic candidates may only be uncovered with a significantly larger number of patients exposed to our therapeutic candidates.

In the event that any of our therapeutic candidates receives marketing approval and we, our collaborators or others identify undesirable side effects caused by a product or any other similar therapeutics, any of the following adverse events could occur:

•regulatory authorities may withdraw their approval of the product;

•additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component of the product;

•we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

•regulatory authorities may require the addition of safety-related labeling statements, such as a “black box” warning or a contraindication;

•we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients or to implement other aspects of a REMS such as a restricted distribution program or educational programs for prescribers;

•we could be sued and held liable for harm caused to patients;

•the product may become less competitive; and

•our reputation may suffer.

In addition, adverse side effects caused by any therapeutics that may be similar in nature to our therapeutic candidates could delay or prevent marketing approval of our therapeutic candidates, limit the commercial profile of an approved label for our therapeutic candidates, or result in significant negative consequences for our therapeutic candidates following marketing approval.

We believe that any of the above described events could prevent us from achieving or maintaining market acceptance of our therapeutic candidates, if approved, and could delay, impede and/or substantially increase the costs of commercializing our therapeutic candidates thus significantly impacting our ability to successfully commercialize our therapeutic candidates and generate revenue. Any of the above described occurrences may materially and adversely affect our business, financial condition, results of operations and prospects.

We expect to develop certain of our therapeutic candidates in combination with other therapies, and safety or supply issues with combination use products may delay or prevent development and approval of our therapeutic candidates.

We intend to develop certain of our therapeutic candidates in combination with one or more approved or investigational cancer therapies. Even if any therapeutic candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product or that safety, efficacy, manufacturing or supply issues could arise with any of those existing therapies. If the therapies we use in combination with our therapeutic candidates are replaced as the standard of care for the indications we choose for any of our therapeutic candidates, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially.

We also may evaluate our therapeutic candidates in combination with one or more cancer therapies that have not yet been approved for marketing by the FDA or similar regulatory authorities outside of the United States. We will not be able to market and sell any therapeutic candidate we develop in combination with an unapproved cancer therapy if that unapproved cancer therapy does not ultimately obtain marketing approval. In addition, unapproved cancer therapies face the same risks described with respect to our therapeutic candidates currently in development and clinical trials, including the potential for serious AEs, delay in their clinical trials and lack of FDA approval.

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If the FDA or similar regulatory authorities outside of the United States do not approve these other drugs or revoke their approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination our therapeutic candidates, we may be unable to obtain approval of or market any such therapeutic candidate.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.

We may not be able to initiate or continue clinical trials for our therapeutic candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. In particular, we have experienced some difficulty enrolling patients for our clinical trials for INBRX-101 since patients with AATD are particularly susceptible to COVID-19 and the physicians acting as clinical investigators for our clinical sites may be otherwise engaged with treating COVID-19 patients. For instance, during the second and third quarters of 2020 as a result of the COVID-19 pandemic, we temporarily suspended enrollment for our trial for INBRX-101. This trial resumed enrollment during the fourth quarter of 2020 but there is no guarantee that we will not have to suspend enrollment for this trial again in the future. Should any competitors have ongoing clinical trials for therapeutic candidates treating the same indications as our therapeutic candidates, patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ therapeutic candidates.

Patient enrollment is affected by other factors including:

•the severity of the disease under investigation;

•the patient eligibility criteria for the study in question;

•the perceived risks and benefits of the therapeutic candidate under study;

•our payments for conducting clinical trials;

•the patient referral practices of physicians; and

•the proximity and availability of clinical trial sites for prospective patients.

Our inability to enroll a sufficient number of patients for any of our clinical trials could result in significant delays and could require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our therapeutic candidates and in delays to commercially launching our therapeutic candidates, if approved, which would materially harm our business.

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of any of our therapeutic candidates may be delayed, and our business may be harmed.

We have provided, and will continue to provide, a number of timing estimates regarding the initiation of clinical trials and clinical development milestones, and the expected availability of data resulting from these trials for certain of our therapeutic candidates. We expect to continue to estimate the timing of these types of development milestones and our expected timing for the accomplishment of various other scientific, clinical, regulatory and other product development objectives. From time to time, we may publicly announce the expected timing of some of these events. However, the achievement of many of these milestones and events may be outside of our control. All of these timing estimations are based on a variety of assumptions we make which may cause the actual timing of these events to differ from the timing we expect, including:

•our available capital resources and our ability to obtain additional funding as needed;

•the rate of progress, costs and results of our clinical trials and research and development activities;

•our ability to identify and enroll patients who meet clinical trial eligibility criteria;

•our receipt of clinical trial clearances or approvals by the FDA, EMA and other regulatory authorities and the timing of these approvals;

•our ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of our therapeutic candidates;

•the efforts of our collaborators and licensees, including Celgene, with respect to the commercialization of our therapeutics;

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•the securing of, costs related to, and timing issues associated with, manufacturing our therapeutic candidates and, if any of our therapeutic candidates are approved, associated with sales and marketing activities and the commercial manufacture of our therapeutic candidates; and

•circumstances arising from or relating to the COVID-19 pandemic, including potential effects on the global supply chain, our manufacturers and the availability of raw materials needed for the research and development of our therapeutic candidates.

If we fail to achieve announced milestones in the timeframes we expect, the future marketing approval and commercialization of any of our therapeutic candidates may be delayed, and our business, financial condition, results of operations, and prospects may be harmed and our stock price may decline.

Initial, interim, topline and preliminary data from our clinical trials that we may announce, observe or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

We expect from time to time, to publish initial, interim, topline or preliminary data from our clinical trials. Our clinical trials are also conducted as “open-label” trials. An open-label trial is one where both the study participant and investigator know whether the participant is receiving the therapeutic candidate and where we (as the sponsor) have access to trial data on an ongoing basis during the trial. These initial, interim, topline and preliminary data from our clinical trials that we may publish from time to time or that we may observe on an ongoing basis in our open-label trials may change as more data become available and, accordingly, they are not necessarily predictive of final results. Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change as participant enrollment continues, more participant data becomes available and we issue our final clinical trial report. Initial, interim, topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, initial, interim, topline and preliminary data should be viewed with caution until the final data are available. Material adverse changes in the final data compared to the interim data could significantly harm our business prospects.

The market opportunities for any current or future therapeutic candidate we develop, if and when approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small.

Cancer therapies are sometimes characterized as first-, second-, or third-line, and the FDA often approves new therapies initially only for third-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation therapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second- and third-line therapies are administered to patients when prior therapy is not effective. We expect to initially seek approval of certain of our therapeutic candidates as a therapy for patients who have received one or more prior treatments. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee that therapeutic candidates we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.

The number of patients who have the cancers we are targeting may turn out to be lower than expected. Additionally, the potentially addressable patient population for our current programs or future therapeutic candidates may be limited, if and when approved. Even if we obtain significant market share for any therapeutic candidate, if and when approved, if the potential target populations are small, we may never achieve profitability without obtaining marketing approval for additional indications, including to be used as first- or second-line therapy.

We rely on third parties to conduct all of our clinical trials and certain of our preclinical studies and intend to continue to do so. If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations and prospects.

While we expect to continue our current clinical trials and expect to initiate clinical trials in the near term for many of our therapeutic candidates, we do not independently conduct clinical trials. As such, while we perform certain functions internally, we currently rely and intend to continue to rely on third-party CROs, clinical data management organizations and consultants to help us design, conduct, supervise and monitor clinical trials of our therapeutic

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candidates. As a result, we will have less control over the timing, quality and other aspects of our clinical trials than we would have had we conducted them on our own. There is a limited number of third party service providers that specialize or have the expertise required to achieve our business objectives. If any of our relationships with these third-party CROs or clinical investigators terminate, we may not be able to enter into arrangements with alternative CROs or investigators or to do so on commercially reasonable terms. Further, these investigators, CROs and consultants are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs. The third parties with which we contract might not be diligent, careful or timely in conducting our preclinical studies or clinical trials. These third parties may also be susceptible to disruption as a result of health crises such as the COVID-19 pandemic or periods of societal unrest. For example, we currently retain CROs located in Hong Kong. These CROs may be negatively affected by, or subject to disruption arising from, the societal unrest and regulatory regime change related to China’s passage of a national security law exerting additional control by mainland China over activities in Hong Kong. If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy the legal and regulatory requirements for the conduct of preclinical studies or clinical trials or meet expected deadlines for any reason, our clinical development programs could be delayed and otherwise adversely affected.

In all events, we will be responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the general investigational plan and protocols for the relevant study or trial. The FDA requires nonclinical studies to be conducted in accordance with good laboratory practices and clinical trials to be conducted in accordance with GCPs including practices and requirements for designing, conducting, recording and reporting the results of nonclinical studies and clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected. Our reliance on third parties we do not control will not relieve us of these responsibilities and requirements. Any adverse development or delay in our clinical trials could have a material and adverse effect on our business, financial condition, results of operations and prospects.

We are dependent on Celgene for the successful development, manufacture and commercialization of the Celgene Licensed Intellectual Property. If Celgene does not devote sufficient resources to the development, manufacture and commercialization of the Celgene Licensed Intellectual Property, is unsuccessful in its efforts, or chooses to terminate the Celgene Agreement with us, we may not receive any further proceeds from the Celgene Agreement and our business could be materially harmed.

Pursuant to the terms of the Celgene Agreement, we have exclusively licensed (even as to us) to Celgene the right to develop, manufacture and commercialize the Celgene Licensed Intellectual Property. Celgene is obligated to use commercially reasonable efforts to clinically develop and commercialize the Celgene Licensed Intellectual Property. However, Celgene may ultimately determine it is not commercially reasonable to continue development of the Celgene Licensed Intellectual Property. This outcome could occur for many reasons, including internal business reasons or because of unfavorable regulatory feedback. Further, on review of any safety and efficacy data then available for potential candidates relating to the Celgene Licensed Intellectual Property, the FDA may impose requirements on a clinical trial program that would render the program commercially nonviable. In the event of any such decision, we would be unable to advance such program ourselves.

Per the terms of the Celgene Agreement, Celgene has full control and authority over the development and commercialization of the Celgene Licensed Intellectual Property. We may disagree with Celgene about the development strategy it employs, but we will have limited rights to impose our preferred development strategy on Celgene. Celgene may elect to discontinue the development of the Celgene Licensed Intellectual Property.

The Celgene Licensed Intellectual Property may not be scientifically or commercially successful for us due to a number of important factors, including the following:

•Celgene has wide discretion in determining the efforts and resources that it will apply to its development, manufacture and commercialization of the Celgene Licensed Intellectual Property. The timing and amount of any development milestones, regulatory milestones and royalties that we may receive under the Celgene

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Agreement will depend on, among other things, Celgene’s efforts, allocation of resources and successful development and commercialization of the Celgene Licensed Intellectual Property and the other antibodies that are the subject of the Celgene Agreement;

•Celgene may terminate the Celgene Agreement without cause and for circumstances outside of our control, which could make it difficult for us to attract new strategic partners or adversely affect how we are perceived in scientific and financial communities;

•Celgene may develop or commercialize the Celgene Licensed Intellectual Property in such a way as to elicit litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential liability; and

•Celgene may not comply with all applicable regulatory requirements, or may fail to report safety data in accordance with all applicable regulatory requirements.

If Celgene were to breach the Celgene Agreement, we may need to enforce our right to terminate the Celgene Agreement in legal proceedings, which could be costly and cause delay in our ability to receive our rights back to develop and commercialize the Celgene Licensed Intellectual Property. If we were to terminate the Celgene Agreement due to Celgene’s breach or if Celgene terminated the Celgene Agreement without cause upon 30 days’ written notice, the development and commercialization of the Celgene Licensed Intellectual Property could be delayed, curtailed or terminated. Additionally, even if the Celgene Agreement is terminated, we may not be able to dispose of the Celgene Licensed Intellectual Property in a strategic transaction without Celgene’s consent.

Celgene became a Bristol-Myers Squibb Company in November 2019. Bristol-Myers Squibb Company may again enter into one or more transactions with third parties, including other mergers, consolidations, reorganizations, sale of substantial assets, sales of substantial stock or other changes in control involving Celgene. These types of transactions could divert the attention of Celgene’s management and adversely affect Celgene’s ability to retain and motivate key personnel who are important to the continued development of the Celgene Licensed Intellectual Property. In addition, the third party to any such transaction could determine to reprioritize Celgene’s development programs such that Celgene ceases to diligently pursue the development of the Celgene Licensed Intellectual Property, and/or cause the Celgene Agreement to terminate. If Celgene does not devote sufficient resources to the development, manufacture and commercialization of the Celgene Licensed Intellectual Property, is unsuccessful in its efforts, or chooses to terminate the Celgene Agreement with us, we may not receive any further proceeds from the Celgene Agreement and our business could be materially harmed.

We are currently party to license agreements with Elpiscience and Transcenta for the development and, if approved, commercialization of INBRX-105 and INBRX-106, and INBRX-109, respectively. We may in the future enter into additional collaborations with third parties to develop our therapeutic candidates, including collaborations with Chiesi if Chiesi exercises its option pursuant to the Chiesi Option Agreement. If these collaborations are not successful, our business could be harmed.

We are currently party to two different license agreements, or the Elpiscience Agreements, with Elpiscience, pursuant to which we granted Elpiscience exclusive licenses for the development and, if approved, commercialization of INBRX-105 and INBRX-106 in China, Hong Kong, Macau and Taiwan. We are also party to the Transcenta License Agreement. Ultimately, Chiesi may not exercise its option pursuant to the Chiesi Agreement. If Chiesi does not exercise its option under the Chiesi Agreement, we could incur additional expenses for the development, and if approved, the commercialization of INBRX-101. We may enter into additional collaborations with third parties in the future, including collaborations with Chiesi if Chiesi exercises its option pursuant to the Chiesi Option Agreement. Any collaborations that we are party to may pose several risks, including the following:

•collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

•collaborators may not perform their obligations as expected;

•the clinical trials conducted as part of these collaborations may not be successful;

•collaborators may not pursue development and commercialization of any therapeutic candidates that achieve marketing approval or may elect not to continue or renew development or commercialization programs based on clinical trial results;

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•changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

•collaborators may delay clinical trials, provide insufficient funding for clinical trials, stop a clinical trial or abandon a therapeutic candidate, repeat or conduct new clinical trials or require a new formulation of a therapeutic candidate for clinical testing;

•we may not have access to, or may be restricted from disclosing, certain information regarding therapeutic candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such therapeutic candidates;

•collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our therapeutic candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•therapeutic candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own therapeutic candidates or products, which may cause collaborators to cease to devote, or limit, resources to the commercialization of our therapeutic candidates;

•a collaborator with marketing and distribution rights to one or more of our therapeutic candidates that achieve marketing approval may not commit sufficient resources to the marketing and distribution of any such therapeutic candidate;

•collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

•disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations;

•collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

•collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable therapeutic candidates.

In addition, we may have disagreements with these collaborators, including disagreements over proprietary rights, collaborator performance, contract interpretation or the preferred course of development of any therapeutic candidates. Any disagreement we may have with our collaborators, may cause delays or termination of the research, development or commercialization of our therapeutic candidates pursuant to the applicable agreement, may lead to additional responsibilities for us with respect to our therapeutic candidates or may result in litigation or arbitration, any of which would be time-consuming and expensive and which would likely divert the attention of our management from our core research and development activities. These types of disputes could materially harm our financial condition and our business.

The manufacture of biotechnology products is complex, and manufacturers often encounter difficulties in production. If we or any of our third party manufacturers encounter such difficulties, or otherwise fail to comply with their contractual obligations, the development or commercialization of our therapeutic candidates could be delayed or stopped.

While we have found that our sdAb-based therapeutic candidates can be readily manufactured at high yields with established processes used to produce therapeutic proteins, the manufacture of biotechnology products is generally complex and requires significant expertise and capital investment. We and our contract manufacturers must comply with cGMP regulations and guidelines for clinical trial product manufacture and for commercial product manufacture. Manufacturers of biotechnology products often encounter difficulties in production, particularly in scaling up, addressing product quality, product comparability, validating production processes and mitigating potential sources of contamination. These problems include difficulties with raw material procurement, production costs and yields, quality control, product quality, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if microbial, viral or other contaminations are discovered in our therapeutics or in the manufacturing facilities in which our therapeutics are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

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We cannot assure you that manufacturing problems, including supply chain disruptions of any of our therapeutic candidates or products will not occur in the future. Any delay or interruption in the supply of preclinical or clinical trial supplies, including any delays arising from circumstances related to the COVID-19 pandemic or supply chain disruptions, could delay the completion of these trials, increase the costs associated with maintaining these trial programs and, depending upon the period of delay, require us to commence new trials at additional expense or terminate trials completely.

If we were to experience an unexpected loss of supply of, or if any supplier were unable to meet our demand for any of our therapeutic candidates or future approved products we seek to commercialize, if any, we could experience delays in our research or planned clinical studies or be forced to stop our development or commercialization efforts. We could be unable to find alternative suppliers of acceptable quality, in the appropriate volumes and at an acceptable cost. Moreover, our suppliers are often subject to strict manufacturing requirements and rigorous testing requirements, which could limit or delay production. The long transition periods needed to switch manufacturers and suppliers, if necessary, would significantly delay our clinical studies and the commercialization of our therapeutics, if approved, which would materially adversely affect our business, prospects, financial condition and results of operation.

We rely on third parties to supply and manufacture our therapeutic candidates, and we expect to continue to rely on third parties to manufacture and supply our therapeutics, if approved. The development of therapeutic candidates and the commercialization of any therapeutic candidates, if approved, could be stopped, delayed or made less profitable if any of these third parties fail to provide us with sufficient quantities of therapeutic candidates or therapeutics, fail to do so at acceptable quality levels or prices, or fail to maintain or achieve satisfactory regulatory compliance.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to develop and manufacture our therapeutic candidates for use in the conduct of our trials or for commercial supply, if our therapeutics are approved. Instead, we rely on, and expect to continue to rely on third-party providers to manufacture the supplies for our preclinical studies and clinical trials. We currently rely on a limited number of third-party contract manufacturers for our required raw materials, antibodies, and other biologics for our preclinical research and clinical trials, as well as for the manufacture of supplies for our therapeutic candidates. To the extent any of our manufacturing partners is unable to fulfill these obligations in a timely manner, including as a result of circumstances relating to the COVID-19 pandemic or circumstances related to China’s implementation of its security law to exert additional control over activities in Hong Kong, our clinical trials may be delayed and our business may be adversely affected. In general, reliance on third party providers may expose us to more risk than if we were to manufacture our therapeutic candidates ourselves. We do not control the operational processes of the contract manufacturing organizations with whom we contract, and are dependent on these third parties for the production of our therapeutic candidates in accordance with relevant regulations (such as cGMP), which include, among other things, quality control and the maintenance of records and documentation.

Our third-party manufacturers may be unable to successfully scale up manufacturing of our therapeutic candidates in sufficient quality and quantity, which would delay or prevent us from developing our therapeutic candidates and commercializing any approved therapeutic candidates.

Our manufacturing partners may be unable to successfully increase the manufacturing capacity for our therapeutic candidates in a timely or cost-effective manner, or at all, as needed for our development efforts or, if our therapeutic candidates are approved, our commercialization efforts. Quality issues may also arise during scale-up activities. If we, or any manufacturing partners, are unable to successfully scale up the manufacture of our therapeutic candidates in sufficient quality and quantity, the development, testing, and clinical trials of our therapeutic candidates may be delayed or infeasible, and marketing approval or future commercial launch of any resulting therapeutic may be delayed or not obtained, which could significantly harm our business.

Failure to successfully identify, develop and commercialize additional therapeutics or therapeutic candidates could impair our ability to grow.

Although a substantial amount of our efforts will focus on the continued preclinical and clinical testing and potential approval of our therapeutic candidates in our current pipeline, we expect to continue to innovate and potentially expand our portfolio. Because we have limited financial and managerial resources, research programs to identify

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therapeutic candidates may require substantial additional technical, financial and human resources, whether or not any new potential therapeutic candidates are ultimately identified. Our success may depend in part upon our ability to identify, select and develop promising therapeutic candidates and therapeutics. We may expend resources and ultimately fail to discover and generate additional therapeutic candidates suitable for further development. All therapeutic candidates are prone to risks of failure typical of biotechnology product development, including the possibility that a therapeutic candidate may not be suitable for clinical development as a result of its harmful side effects, limited efficacy or other characteristics indicating that it is unlikely to receive approval by the FDA, the EMA and other comparable foreign regulatory authorities or to achieve market acceptance. If we do not successfully develop and commercialize new therapeutic candidates we have identified and explored, our business, prospects, financial condition and results of operations could be adversely affected.

Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material and adverse effect on our business, financial condition, results of operations and prospects.

We are exposed to significant product liability risks inherent in the development, testing, manufacturing and marketing of biotechnology treatments of any therapeutic candidates for which we or our collaborators may conduct clinical trials. Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing any approved products, these claims could result in an FDA investigation of the safety and effectiveness of our future commercial products, our manufacturing processes and facilities (or the manufacturing processes and facilities of our third-party manufacturers) or our marketing programs, a recall of our products or more serious enforcement action, limitations on the approved indications for which the product may be used or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related litigation, a diversion of management’s time and our resources, substantial monetary awards to clinical trial participants or patients and a decline in our stock price. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by potential product liability claims that could have a material and adverse effect on our business, financial condition, results of operations and prospects.

If our therapeutic candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to commercialize successfully any such therapeutic candidates.

We currently have no sales, marketing or distribution capabilities. While we have marketing and commercialization agreements in place for certain territories with our collaborators, we will still need to expand our own internal sales, marketing and distribution capabilities to commercialize our approved therapeutic candidates, if any, in the United States and other remaining worldwide territories, or will need to enter into collaborations with third parties to perform these services. Any internal effort would be expensive and time-consuming, and we would need to commit significant financial and managerial resources to develop an internal marketing and sales force with technical expertise and the related supporting distribution, administration and compliance capabilities. If we were to rely on additional third parties with these capabilities to market our future therapeutics or were to decide to co-promote products with any of our current or future collaborators, we would need to establish and maintain or revise existing marketing and distribution arrangements with these partners, and there can be no assurance that we will be able to enter into such arrangements on acceptable terms or at all. Any revenue we receive in connection with third-party license, marketing or distribution arrangements, including the Celgene Agreement, the Chiesi Option Agreement and license agreements with our licensing partners in China, will depend upon the efforts of these third parties, and there can be no assurance these third parties will establish adequate sales and distribution capabilities or be successful in gaining market acceptance of any approved product. If we are not successful in commercializing any product approved in the future, either on our own or through third parties, our business, financial condition, results of operations and prospects could be materially and adversely affected.

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The future commercial success of our therapeutic candidates will depend on the degree of market acceptance of our therapeutic candidates among physicians, patients, healthcare payors and the medical community.

Our therapeutic candidates are in early stages of development, and many of our therapeutic candidates are still in preclinical development; we may never have an approved product that is commercially successful. Due to the inherent risk in the development of biotechnology products, it is probable that not all or none of the therapeutic candidates in our pipeline, including any that are or may be licensed to third parties, will successfully complete development and be commercialized. Furthermore, even when available on the market, our products may not achieve an adequate level of acceptance by physicians, patients and the medical community, and we may not become profitable. In addition, efforts to educate the medical community and third-party payors on the benefits of our products may require significant resources and may never be successful, which would prevent us from generating significant revenue or becoming profitable. Market acceptance of any approved products by physicians, patients and healthcare payors will depend on a number of factors, many of which are beyond our control, including, but not limited to:

•changes in the standard of care for the targeted indications for any approved product;

•wording in the FDA- or EMA-approved prescribing information;

•sales, marketing and distribution support;

•potential product liability claims;

•acceptance by physicians, patients and healthcare payors of each product as safe, effective and cost-effective;

•relative convenience, ease of use, ease of administration and other perceived advantages over alternative products;

•prevalence and severity of adverse events or publicity;

•limitations, precautions or warnings listed in the summary of product characteristics, patient information leaflet, package labeling or instructions for use;

•the cost of treatment with our therapeutics in relation to alternative treatments;

•the extent to which products are approved for inclusion and adequately reimbursed on formularies of hospitals and third-party payors, including managed care organizations; and

•whether our products are designated in the label, under physician treatment guidelines or under reimbursement guidelines as a first, second, third or last line therapy.

Risks Related to Our Organization and Operations

We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than the therapeutic candidates we develop, our commercial opportunities will be negatively impacted.

The life sciences industry is highly competitive. We are currently developing therapeutic candidates that will compete, if approved, with other products and therapies that currently exist or are being developed. Our primary competitors fall into the following groups:

•Companies developing novel therapeutics based on sdAb or alternative scaffold product candidates, including Alligator Bioscience AB, Camel-IDS N.V., Crescendo Biologics Ltd., GlaxoSmithKline plc, IGM Biosciences, Inc., Molecular Partners AG, Pieris Pharmaceuticals, Inc., Sanofi S.A. and VHsquared Ltd.;

•Antibody drug discovery companies that may compete with us in the search for novel therapeutic antibody targets, including Regeneron Pharmaceuticals, Inc., Adimab LLC, Genmab A/S, Macrogenics, Inc., Merus N.V., MorphoSys AG, Numab Therapeutics AG, Amgen, Inc., Xencor Inc., and Zymeworks Inc.;

•Companies developing therapeutics designed to treat AATD, including CSL Limited, Grifols, S.A., Kamada Ltd., Takeda Pharmaceutical Company Limited and Centessa Pharmaceuticals PLC; and

•Companies developing cytokine therapeutics, including Alkermes PLC, Altor BioScience, ImmunityBio, Inc., Medicenna Therapeutics Corp., Nektar Therapeutics, Neoleukin Therapeutics, Inc., Novartis AG, Pandion Therapeutics, Inc., Merck & Co., Philogen S.p.A., Roche Holding AG, Rubius Therapeutics, Inc., SOTIO Biotech, Synthekine, Inc., Sanofi S.A., Xencor, Inc.

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Our competitors also include large pharmaceutical and biotechnology companies who may be developing therapeutic candidates with mechanisms similar to or targeting the same indications as our therapeutic candidates.

Products we may develop in the future are also likely to face competition from other products and therapies, some of which we may not currently be aware. We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions. Many of our competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources than we do. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical products. These companies also have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the therapeutic candidates that we develop obsolete. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval or discovering, developing and commercializing products in our field before we do.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less expensive than any products that we may develop. Our competitors also may obtain FDA, EMA or other marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Even if the therapeutic candidates we develop achieve marketing approval, they may be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness.

Smaller and other early stage companies may also prove to be significant competitors. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. In addition, the biopharmaceutical industry is characterized by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our therapeutic candidates obsolete, less competitive or not economical.

Our business, the conduct of our clinical trials, results of operations, financial condition, and prospects may be adversely affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus disease pandemic.

Our business could be adversely affected by widespread outbreak of illness or other communicable diseases, health epidemics, or any other public health crisis. On January 30, 2020, the World Health Organization, or the WHO, announced a global health emergency because of a novel strain of coronavirus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or novel coronavirus, which causes coronavirus disease 2019, or COVID-19, originating in Wuhan, China. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

During 2020 and continuing through 2021, COVID-19 spread to most regions of the world, including California, where our primary office and laboratory space is located.

As a result of the COVID-19 pandemic, we may experience disruptions that could severely impact our business, preclinical studies and clinical trials, including:

•We are, with our partners, conducting clinical trials and other research in geographies that are affected by the COVID-19 pandemic. Potential impacts of the COVID-19 pandemic on our various clinical trials may include delays related to patient enrollment, dosing and study monitoring due to changes in policies at

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various clinical sites, federal, state, local or foreign laws, rules and regulations, including quarantines or other travel restrictions. They may also be impacted by the prioritization of healthcare resources toward pandemic efforts, including diminished attention of physicians serving as our clinical trial investigators and reduced availability of site staff supporting the conduct of our clinical trials, interruption or delays in the operations of the FDA, or other reasons related to the pandemic. For example, we temporarily suspended enrollment for our INBRX-101 Phase 1 clinical trial as a direct result of the COVID-19 pandemic during the second and third quarters of 2020. While our oncology-related clinical trials have not been materially impacted to date, it is possible that these programs may be negatively impacted in the future. If the COVID-19 pandemic continues, other aspects of our clinical trials may be adversely affected, delayed or interrupted, including, for example, site initiation, patient recruitment, further or additional delays in enrollment, availability of clinical trial materials, and data analysis. Some patients and clinical investigators may not be able to comply with clinical trial protocols and patients may choose to withdraw from our trials. It is unknown how long these suspension, pauses or disruptions could continue. FDA has issued a guidance for industry, “FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic Guidance for Industry, Investigators, and Institutional Review Boards,” which is being periodically updated to continue clarifying for affected stakeholders to ensure the safety of clinical trial participants, maintain compliance with GCPs, and minimize risks to trial and clinical data integrity. We intend to follow FDA’s recommendations in order to address unavoidable protocol deviations due to COVID-19 illness or COVID-19 control measures, as appropriate.

•We currently rely on third parties to, among other things, manufacture raw materials, manufacture our therapeutic candidates, ship investigational drugs and clinical samples, perform quality testing and supply other goods and services to run our business. If any third party in our supply chain for materials are adversely impacted by restrictions resulting from the COVID-19 pandemic, including as a result of staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted, limiting our ability to conduct our research and development operations.

•We have requested that our employees, including all of our administrative employees, work remotely and have restricted on-site staff to only those personnel who must perform essential on-site activities such as activities in our research and development laboratories. Our increased reliance on employees working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors.

•Our employees conducting research and development activities may be more limited in their ability to access our laboratories for an extended period of time as a result of the rigorous workplace policies and guidelines implemented as a result of the COVID-19 pandemic. Additionally, it is possible that governmental authorities will further modify current restrictions. As a result, this could delay timely completion of our research and development efforts.

•Health regulatory agencies globally may experience disruptions in their operations as a result of the COVID-19 pandemic. The FDA and comparable foreign regulatory agencies may have slower response times or be under-resourced to continue to monitor our clinical trials and, as a result, review, inspection, and other timelines may be materially delayed. It is unknown how long these disruptions could continue, were they to occur. Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our therapeutic candidates. For example, regulatory authorities may require that we not distribute a therapeutic candidate lot until the relevant agency authorizes its release. Such release authorization may be delayed as a result of the COVID-19 pandemic and could result in delays to our clinical trials.

•The trading prices for biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our common shares in future offerings or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the spread of COVID-19 could materially and adversely affect our business and the value of our common shares.

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The COVID-19 pandemic continues to rapidly evolve. The ultimate impact of the pandemic on our business operations is highly uncertain and subject to change and will depend on future developments, which cannot be accurately predicted, including the duration of the pandemic, the success of domestic and international vaccination campaigns, the emergence of new viral variants, additional or modified government actions, new information that may emerge concerning the severity and impact of COVID-19 and the actions taken to contain COVID-19 or address its impact in the short and long term, among others. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy.

Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan.

Our success largely depends on the continued service of key management, advisors and other specialized personnel, including Mark P. Lappe, our Chief Executive Officer, Brendan P. Eckelman, Ph.D., our Chief Scientific Officer, and Kelly D. Deck, our Chief Financial Officer, who are all employed at will and for whom we do not have “key man” insurance coverage. The loss of one or more members of our management team or other key employees or advisors could delay our research and development programs and have a material and adverse effect on our business, financial condition, results of operations and prospects. We are dependent on the continued service of our technical personnel because of the highly technical nature of our therapeutic candidates and technologies and the specialized nature of the marketing approval process. Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization. We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations (many of whom have substantially greater financial resources than us), and we might not be able to attract or retain these key employees on conditions that are economically acceptable. Our inability to attract and retain these key employees could prevent us from achieving our objectives and implementing our business strategy, which could have a material adverse effect on our business and prospects.

We have a significant amount of debt which may affect our ability to operate our business and secure additional financing in the future.

In July 2020, we borrowed $10.0 million under the loan and security agreement, or the 2020 Loan Agreement, with Oxford. In November 2020, June 2021, and February 2022, we borrowed an additional $20.0 million, $40.0 million, and $40.0 million respectively, under the Amended 2020 Loan Agreement.

Our obligations under the Amended 2020 Loan Agreement are secured by substantially all of our assets, other than our intellectual property. The Amended 2020 Loan Agreement requires us, and any debt arrangements or instruments we may enter into in the future may require us, to comply with various covenants that limit our ability to, among other things:

•dispose of assets;

•complete mergers or acquisitions;

•incur or guarantee indebtedness;

•sell or encumber certain assets;

•pay dividends or make other distributions to holders of our capital stock, including by way of certain stock buybacks;

•make specified investments;

•engage in different lines of business;

•change certain key management personnel; and

•engage in certain transactions with our affiliates.

These covenants may make it difficult to operate our business. A failure by us to comply with the covenants could result in an event of default, which could adversely affect our ability to respond to changes in our business and manage our operations. Upon the occurrence of an event of default, including the occurrence of a material adverse change, the lender could elect to declare all amounts outstanding to be due and payable and exercise other remedies. If the indebtedness were to be accelerated, our future financial condition could be materially adversely affected.

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We may incur additional indebtedness in the future. The instruments governing such indebtedness could contain provisions that are as, or more, restrictive than our existing debt instruments. If we are unable to repay, refinance or restructure our indebtedness when payment is due, the lenders could proceed against any collateral granted to them to secure such indebtedness or force us into bankruptcy or liquidation. Further, if our business is subject to liquidation, the right to repayment of Oxford and any other holders of indebtedness would be senior to the rights of the holders of our common stock to receive any proceeds from the liquidation.

Our employees and independent contractors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk of fraud or other misconduct by our employees or independent contractors. Misconduct by these parties could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish for our therapeutic candidates, comply with federal and state data privacy, security, fraud and abuse, and other healthcare laws and regulations, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant civil, criminal and administrative penalties, monetary damages, fines, disgorgement, imprisonment, loss of eligibility to obtain marketing approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, reputational harm, diminished profits and future earnings, additional reporting requirements if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with any of these laws, and the curtailment or restructuring of our operations.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties.

Certain of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Our insurance may not provide adequate levels of coverage against claims which may adversely affect our financial condition.

We maintain insurance that we believe is adequate for businesses of our size and type. However, there are types of losses that we believe are not economically reasonable to insure or that cannot be insured against. For instance, we believe because directors and officers, or D&O, liability insurance has become cost prohibitive with high retentions providing minimal coverage, we recently chose not to renew our D&O policy.

It is possible that we may be subject to securities litigation in the future, including potential class action or stockholder derivative actions. Our indemnification agreements with our directors and certain officers, as well as

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Delaware General Corporation Law, may require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Without D&O insurance, the amounts we would pay to defend any such litigation or indemnify our officers and directors should they be subject to legal action based on their service to us could have a material adverse effect on our financial condition, results of operations and liquidity.

We expect to expand our development and regulatory capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development and regulatory affairs, as well as sales and marketing to the extent any of our therapeutic candidates approach receipt of marketing authorization. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

We may not be able to integrate efficiently or achieve the expected benefits of any acquisitions of complementary businesses, therapeutic candidates or technologies.

Should we in the future acquire any complementary business, therapeutic candidates or technologies, our ability to integrate and manage acquired businesses, therapeutic candidates or technologies effectively will depend upon a number of factors including the size of the acquired business, the complexity of any therapeutic candidate or technology and the resulting difficulty of integrating the acquired business’s operations, if any. Our relationship with current employees or employees of any acquired business may become impaired. We may also be subject to unexpected claims and liabilities arising from such acquisitions. These claims and liabilities could be costly to defend, could be material to our financial condition and might exceed either the limitations of any applicable indemnification provisions or the financial resources of the indemnifying parties. There can also be no assurance that we will be able to assess ongoing profitability and identify all actual or potential liabilities of a business, therapeutic candidate or technology prior to its acquisition. If we acquire businesses, therapeutic candidates or technologies that result in assuming unforeseen liabilities in respect of which it has not obtained contractual protections or for which protection is not available, this could materially adversely affect our business, prospects, financial condition and results of operations.

Our business may be adversely affected as a result of computer system failures.

Any of the internal computer systems belonging to us or our third-party service providers are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failure. Any system failure, accident or security breach that causes interruptions in our own or in third-party service vendors’ operations could result in a material disruption of our development programs. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our or our partners’ or collaborators’ marketing approval efforts and significantly increase our costs in order to recover or reproduce the lost data. To the extent that any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur liability, our development programs and competitive position may be adversely affected and the further development of our therapeutic candidates may be delayed. Furthermore, we may incur additional costs to remedy the damage caused by these disruptions or security breaches.

Cybersecurity breaches could expose us to liability, damage our reputation, compromise our confidential information or otherwise adversely affect our business.

We maintain sensitive company data on our computer networks, including our intellectual property and proprietary business information. We face a number of threats to our networks from unauthorized access, accidental acts or omissions that expose vulnerabilities, security breaches and other system disruptions. As noted above, certain of our employees are presently and may in the future be working remotely as a result of the COVID-19 pandemic. We may face additional cybersecurity risks as a result of these circumstances and despite our security measures, our

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infrastructure may be vulnerable to attacks by hackers or vulnerable to other disruptive problems. Our third-party partners, including CROs and providers of data hosting or cloud services, as well as suppliers, distributors, alliances, and other third-party service providers, face similar risks, which could affect us directly or indirectly.

The United States federal and all state and foreign governments have adopted or proposed requirements regarding the collection, distribution, use, security, and storage of personally identifiable information and other data relating to individuals, and federal and state consumer protection laws are being applied to enforce regulations related to the collection, use, and dissemination of data. Some of these federal, state and foreign government requirements include obligations of companies to notify individuals and others of security breaches involving certain personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors, or organizations with which we have formed strategic relationships. Even though we may have contractual protections with such vendors, contractors, or other organizations, notifications and follow-up actions related to a security breach could impact our reputation, prompt regulatory scrutiny and enforcement, cause us to incur significant costs, including legal expenses, harm customer confidence, hurt our expansion into new markets, cause us to incur remediation costs, or cause us to lose existing customers.

Any such security breach may compromise information stored on our networks and may result in significant data losses or theft of our intellectual property or proprietary business information, it may also subject us to significant fines, penalties or liabilities for any noncompliance with certain privacy and security laws. A cybersecurity breach could adversely affect our reputation and could result in other negative consequences, including disruption of our internal operations, increased cybersecurity protection costs, lost revenue or litigation. We maintain cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business, or reputational losses that may result from an interruption of breach of our systems.

Our current operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by earthquakes, medical epidemics or pandemics, or other natural disasters.

Our current operations are located in our facilities in La Jolla, California. Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics or pandemics, power shortage, telecommunication failure or other natural or man-made accidents or incidents, including the COVID-19 pandemic, that results in us being unable to fully utilize our facilities, or the manufacturing facilities of our third-party contract manufacturers, may have a material and adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Loss of access to these facilities may result in increased costs, delays in the development of our therapeutic candidates or interruption of our business operations. Earthquakes, medical epidemics or pandemics, including the COVID-19 pandemic, or other natural disasters could further disrupt our operations, and have a material and adverse effect on our business, financial condition, results of operations and prospects. Certain of these natural disasters, including fires and severe weather events may be exacerbated by the effects of climate change. If a natural disaster, pandemic, including the COVID-19 pandemic, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as our research facilities or if similar events occurred elsewhere effecting the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, could have a material and adverse effect on our business. As part of our risk management policy, we maintain insurance coverage at levels that we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance will be sufficient to satisfy any damages and losses. If our facilities, or the manufacturing facilities of our third-party contract manufacturers, are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed. Any business interruption may have a material and adverse effect on our business, financial condition, results of operations and prospects.

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Risks Related to Intellectual Property

If we are not able to obtain and enforce patent protection for our technologies or therapeutic candidates, development and commercialization of our therapeutic candidates may be adversely affected.

Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, patents and patent applications protecting, or seeking to protect, our therapeutic candidates and methods for treating patients using our therapeutic candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others. Our patent estate includes various issued United States patents, United States pending non-provisional patent applications, United States pending provisional applications, pending PCT applications, issued foreign patents, and foreign patent applications currently pending in various foreign jurisdictions.

While we will endeavor to protect our therapeutic candidates with intellectual property rights such as patents, as appropriate, the process of obtaining, maintaining, and enforcing patents is time-consuming, expensive and sometimes unpredictable, and we may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to any patents we may license to or from third parties. Therefore, such patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

Our existing issued and granted patents and any future patents we obtain may not be sufficiently broad to prevent others from using our technology or from developing competing products and technology. There is no guarantee that any of our pending patent applications will result in issued or granted patents, that any of our issued or granted patents will not later be found to be invalid or unenforceable or that any issued or granted patents will include claims that are sufficiently broad to provide meaningful protection from any competitors. Our competitors may be able to circumvent our patents by developing similar or alternative therapeutic candidates in a non-infringing manner. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our current and future proprietary technology and therapeutic candidates are covered by valid and enforceable patents or are effectively maintained as trade secrets. If third parties disclose or misappropriate our proprietary rights, it may materially and adversely affect our business.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which non-compliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case. The standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology patents. As such, we do not know the degree of future protection that we will have on our proprietary therapeutics and technology.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation. Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such initial grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims altogether, e.g., due to a determination that the claims are invalid or unenforceable. In addition, there can be no assurance that:

•others will not or will not be able to legally make, use or sell products or therapeutic candidates that are the same as or similar to our therapeutic candidates despite the claims of the patents that we own or license;

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•we or our licensors, or our collaborators are the first to make the inventions covered by each of our issued patents and pending patent applications that we own or license;

•we or our licensors, or our collaborators are the first to file patent applications covering certain aspects of our inventions;

•others will not independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

•any issued patents that we own or have licensed will provide us with any competitive advantage; or

•the patents of others will not have a material or adverse effect on our business, financial condition, results of operations and prospects.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

We may not be able to protect our intellectual property rights throughout the world.

Obtaining valid and enforceable issued or granted patents covering our therapeutic candidates in the United States and worldwide can be extremely costly. In jurisdictions where we have not obtained patent protection, competitors or third parties may use our technology to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where it is more difficult to enforce a patent as compared to the United States. Third-party or competitor products may compete with our future products in jurisdictions where we do not have issued or granted patents or where our issued or granted patent claims or other intellectual property rights are not sufficient to prevent competitor activities in these jurisdictions. The legal systems of certain countries, particularly certain developing countries, make it difficult to enforce patents and such countries may not recognize other types of intellectual property protection, particularly that relating to biotechnology. This could make it difficult for us to prevent the infringement of our patents or marketing of competing products in violation of our proprietary rights generally in certain jurisdictions. Proceedings to enforce our patent rights in foreign jurisdictions could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, could provoke third parties to assert claims against us, and, whether or not successful, could result in substantial cost and divert our efforts and attention from other aspects of our business.

We generally file a provisional patent application first (a priority filing) at the USPTO. An international application under the PCT is usually filed within 12 months after the priority filing. Based on the PCT filing, national and regional patent applications may be filed in the United States, Europe, Japan, Australia and Canada and, depending on the individual case, also in one, several or all of Brazil, China, India, Israel, Mexico, New Zealand, Russia or Eurasian Patent Organization, Singapore, South Africa, South Korea and other jurisdictions. We have so far not filed for patent protection in all national and regional jurisdictions where such protection may be available. In addition, we may decide to abandon national and regional patent applications before grant. Finally, the grant proceeding of each national or regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant registration authorities, while granted by others. It is also quite common that, depending on the country, various scopes of patent protection may be granted on the same therapeutic candidate or technology.

When a patent is granted by a regional patent office (e.g., Europe or Eurasia), the patent must be validated in individual countries in order to be in effect in those countries. We may decide not to validate regional patents in every available country or at all in any country in the region. In addition, we may decide to abandon national and regional patent applications before or after grant.

The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws in the United States, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. If we or any licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished and we may face additional competition from others in those jurisdictions. Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such

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patent. If we or any licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business and results of operations may be adversely affected.

Changes in patent laws could diminish the value of patents in general, thereby impairing our ability to protect our products.

Changes in either the patent laws or interpretation of the patent laws in the United States and other jurisdictions in which we file patent applications could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. For example, under the Leahy-Smith America Invents Act, or the America Invents Act, enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application is entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. In contrast, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, assuming that other requirements for patentability were met. Furthermore, United States patent law under the America Invents Act allows for post issuance challenges to United States patents, including ex parte reexaminations, inter parte reviews and post grant oppositions. If our United States patents are challenged using such procedures, we may not prevail, possibly resulting in altered or diminished claim scope or loss of patent rights altogether. Similarly, some countries, notably members of the European Union, also have post grant opposition proceedings that can result in changes in scope and/or cancellation of patent claims.

The United States Supreme Court has also ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non compliance with these requirements.

The USPTO, the European Patent Office and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. For example, periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO, the European Patent Office and foreign patent agencies in several stages over the lifetime of the patent. Some jurisdictions also require payment of annuity fees during pendency of a patent application. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non payment of fees and failure to properly legalize and submit formal documents. If we or our licensors or collaboration partners fail to maintain the patents and patent applications covering our therapeutic candidates, our competitors might better be able to enter the market, which would have an adverse effect on our business.

We may be required to reduce the scope of our intellectual property due to intellectual property claims included in the patents or patent applications of others.

Third parties may have filed, and may in the future file, patent applications covering technology similar to ours. It is also possible that we have failed to identify relevant third-party patents or applications. For example, United States applications filed before November 29, 2000 and certain United States applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with this earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our therapeutic candidates could have been filed by others without our knowledge. Additionally, pending patent

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applications that have been published can, subject to certain limitations, be later amended in a manner that could cover any future approved products or our therapeutic candidates. Any such patent application may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies, if possible, or block us from practicing certain aspects of our technology if we are unable to successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned.

If another party has filed a United States patent application on inventions similar to ours that claims priority to an application filed prior to March 16, 2013, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the United States. Similarly, if another party has filed a United States patent application on inventions similar to ours that claims priority to an application filed after March 16, 2013, we may have to participate in a derivation proceeding to determine whether that party derived the claimed invention from an inventor listed on our application and then filed the third-party application without authorization. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our United States patent position with respect to such inventions. In addition, an unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology. Further, changes enacted on March 15, 2013 to the United States patent laws under the America Invents Act resulted in the United States changing from a “first to invent” country to a “first to file” country. As a result, we may lose the ability to obtain a patent if a third party files with the USPTO first and could become involved in proceedings before the USPTO to resolve disputes related to inventorship. We may also become involved in similar proceedings in other jurisdictions.

We or our licensors, licensees or any future strategic partners may become subject to third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, delay or prevent the development and commercialization of our therapeutic candidates, or put our patents and other proprietary rights at risk.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. We or our licensors, licensees or any future strategic partners may be subject to third-party claims for infringement or misappropriation of patent or other proprietary rights. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries including patent infringement lawsuits, interferences, derivations, oppositions and inter partes review proceedings before the USPTO, and corresponding foreign patent offices. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that we may be subject to claims of infringement of the patent rights of third parties. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our current or future therapeutic candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If we, our licensees or our licensors, or any future strategic partners are found to infringe a third-party patent or other intellectual property rights, we could be required to pay damages, potentially including treble damages, if we are found to have willfully infringed. In addition, we, our licensees or our licensors, or any future strategic partners may choose to seek, or be required to seek, a license from a third party, which may not be available on acceptable terms, if at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give any competitors access to the same technology or intellectual property rights licensed to us. If we fail to obtain a required license, the holders of any such patents may be able to block us, our licensees or our collaborators from marketing therapeutic candidates based on our technology until such patents expire, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.

In addition, we may find it necessary to pursue claims or initiate lawsuits to protect or enforce our patent or other intellectual property rights. The cost to us in defending or initiating any litigation or other proceeding relating to

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patent or other proprietary rights, even if resolved in our favor, could be substantial, and litigation would divert our management’s attention. Competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could delay our research and development efforts and limit our ability to continue our operations.

If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products or our technology, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our technology. This loss of patent protection could have a material and adverse effect on our business, financial condition, results of operations and prospects. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without legally infringing our patents or other intellectual property rights.

If we fail to comply with our obligations under the agreements pursuant to which we license intellectual property rights from third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose the rights to intellectual property licensed to us.

We are a party to license agreements under which we are granted rights to third-party intellectual property, and we expect that we may need to enter into additional license agreements in the future. License agreements may impose various development obligations, payment of royalties and fees based on achieving certain milestones, as well as other obligations. If we fail to comply with our obligations under these agreements, the licensor may have the right to terminate the license. The termination of any license agreements or failure to adequately protect such license agreements could prevent us from commercializing therapeutic candidates covered by the licensed intellectual property or otherwise adversely affect our business. Our license agreements may involve sublicenses from third parties which are not the original licensor of the intellectual property at issue. Under these agreements, we would rely on our licensor to comply with its obligations under the primary license agreements, where we may have no relationship with the original licensor of such rights. If the licensors fail to comply with their obligations under these upstream license agreements, the original third-party licensor may have the right to terminate the original license, which may terminate the sublicense. If this were to occur, we would no longer have rights to the applicable intellectual property and, in the case of a sublicense, if we were not able to secure our own direct license with the owner of the relevant rights, which we may not be able to do at a reasonable cost or on reasonable terms, it may adversely affect our ability to continue to develop and commercialize any of our therapeutic candidates incorporating the relevant intellectual property.

Disputes may arise regarding intellectual property subject to a licensing agreement, including:

•the scope of rights granted under the license agreement and other interpretation related issues;

•the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

•the sublicensing of patent and other rights under any collaboration relationships we might enter into in the future;

•our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

•the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborator; and

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•the priority of invention of patented technology.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain any licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected therapeutic candidates.

Our intellectual property agreements with our licensors, licensees, collaborators and third parties may be subject to disagreements over contract interpretation, which could narrow the scope of, or result in termination of, our rights to the relevant intellectual property or technology or increase our financial or other obligations to such third parties, or reduce the financial or other obligations our licensees have to us.

Certain provisions in our intellectual property agreements may be susceptible to multiple interpretations. For example, we may disagree with our licensors, licensees or collaborators regarding whether, when and to what extent various obligations under these agreements apply to certain of our/their therapeutic candidates and products, including various payment, development, commercialization, funding, diligence, sublicensing, insurance, patent prosecution and enforcement and/or other obligations. The resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual property or technology, or affect financial or other obligations under the relevant agreement. In either case, such disagreement could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact conceives or develops intellectual property that we regard as our own. Our assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable, generally expensive, time consuming and are likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material and adverse effect on our ability to compete in the marketplace.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patent protection for certain aspects of our therapeutic candidates, we also consider trade secrets, including confidential and unpatented know-how important to our business. We may rely on trade secrets or confidential know-how to protect our technology, especially where patent protection is believed to be of limited value. Trade secrets and confidential know-how are difficult to maintain as confidential. We seek to protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, partners, outside scientific

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collaborators, CROs, contract manufacturers, consultants, advisors and other third parties. In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact conceives or develops intellectual property that we regard as our own. Our assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

Moreover, even if relevant agreements are entered into, despite these efforts, any of these parties may breach the agreements and unintentionally or willfully disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts in the United States and certain foreign jurisdictions are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them from using that technology or information to compete with us. Moreover, a competitor who independently develops substantially equivalent proprietary information may even apply for patent protection in respect of the same. If successful in obtaining such patent protection, our competitors could limit our use of our trade secrets or confidential know-how. Under certain circumstances, we may also decide to publish some know-how to attempt to prevent others from obtaining patent rights covering such know-how. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.

We may be subject to claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of our employees’ or consultants’ former employers or their clients. These claims may be costly to defend and if we do not successfully do so, we may be required to pay monetary damages and may lose valuable intellectual property rights or personnel.

Many of our employees were previously employed at universities or biotechnology companies, including potential competitors. Although no claims against us are currently pending, we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product could hamper our ability to commercialize, or prevent us from commercializing, our therapeutic candidates, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. Our trademarks may not be approved by one or more governmental trademark offices or may not be approved for use on our products by regulatory agencies, such as the FDA. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.

If our patent terms expire before or soon after our therapeutic candidates are approved, or if manufacturers of biosimilar drugs successfully challenge our patents, our business may be materially harmed.

Patents have a limited duration. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest United States non provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our therapeutic candidates, their manufacture, or use are obtained, once the patent life has expired, we may be open to competition from competitive medications, including biosimilar medications.

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Depending upon the timing, duration and conditions of FDA marketing approval of our therapeutic candidates, one or more of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, and similar legislation in the European Union. The Hatch-Waxman Act permits a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. The patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner than we expect. Also, the scope of our right to exclude during any patent term extension period may be limited or may not cover a competitor’s product or product use. As a result, our revenue from applicable therapeutic candidates, if approved, could be reduced, possibly materially.

Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such drug candidates might expire before or shortly after such drug candidates are commercialized. As a result, our patents and patent applications may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Manufacturers of biosimilar drugs may challenge the scope, validity, or enforceability of our patents in court or before a patent office, and we may not be successful in enforcing or defending those intellectual property rights and, as a result, may not be able to develop or market the relevant product exclusively, which would have a material adverse effect on any potential sales of that product. Upon the expiration of our issued patents or patents that may issue from our pending patent applications, we will not be able to assert such patent rights against potential competitors and our business, financial condition, results of operations, and prospects may be adversely affected.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business nor permit us to maintain our competitive advantage. The following examples are illustrative:

•Others may be able to make therapeutic candidates that are the same as or similar to our therapeutic candidates but that are not covered by the claims of the patents that we own or may have exclusively licensed.

•Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights.

•Third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.

•We may not develop additional technologies that are patentable.

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Risks Related to Government Regulation

We or our collaborators may be unable to obtain marketing approval for any product that we or a collaborator may develop and the marketing approval processes of the FDA and other comparable regulatory authorities outside the United States are lengthy, time-consuming and inherently unpredictable.

Any product that we or our collaborators may attempt to develop, manufacture or market in the United States will be subject to extensive regulation by the FDA, including regulations relating to development, preclinical testing, performance of clinical trials, manufacturing and post-approval commercialization. Preclinical testing, clinical trials and manufacturing, among other activities, will be subjected to an extensive review process before a new therapeutic product may be sold in the United States. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays, including delays arising from the COVID-19 pandemic. The time required to obtain FDA approval, and any other required approvals for biological products is unpredictable but typically requires several years and may never be obtained.

Any product that we or our collaborators may wish to develop, manufacture or market in countries other than the United States will also be subject to numerous foreign regulatory requirements governing the conduct of clinical trials, manufacturing and marketing, pricing and third-party reimbursement among other things in such countries. The foreign marketing approval process includes all of the risks and uncertainties associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in such foreign jurisdictions.

In particular, obtaining marketing approval for biological products requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process, and in many cases the inspection of manufacturing, processing, and packaging facilities by the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use, or there may be deficiencies in cGMP compliance by us or by our contract development and manufacturing organizations, or CDMOs, that could result in the candidate not being approved. Moreover, we have not obtained marketing approval for any therapeutic candidate in any jurisdiction and it is possible that none of our existing therapeutic candidates or any therapeutic candidates we may seek to develop in the future will ever obtain marketing approval.

Our therapeutic candidates could fail to receive, or could be delayed in receiving, marketing approval for many reasons, including any one or more of the following:

•the FDA, EMA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

•we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

•the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for marketing approval;

•we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

•the FDA, EMA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

•the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain marketing approval in the United States or elsewhere;

•upon review of our clinical trial sites and data, the FDA or comparable foreign regulatory authorities may find our record keeping or the record keeping of our clinical trial sites to be inadequate or may identify other GCP deficiencies related to the trials;

•the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies may fail to meet the requirements of the FDA, EMA or comparable foreign regulatory authorities; or    

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•the medical standard of care or the approval policies or regulations of the FDA, EMA or comparable foreign regulatory authorities may significantly change in a manner that renders our clinical data insufficient for approval.

It is possible that none of the therapeutic candidates we or our collaborators may develop will obtain the marketing approvals necessary for us or our collaborators to sell the products either in the United States or any other country. Furthermore, approval by the FDA of a therapeutic product does not assure approval by regulatory authorities outside the United States or vice versa. Even if approval for a therapeutic product is obtained, such approval may be subject to limitations on the indicated uses or appropriate patient population that could result in a significantly reduced potential market size for the product.

If we or our collaborators fail to obtain the appropriate marketing approvals necessary for us or our collaborators to sell our therapeutic candidates, or if the approvals are more limited than those that we intend to seek, our business, financial condition and results of operations would be materially harmed.

We will be subject to stringent domestic and foreign therapeutic and drug regulation with respect to any potential products. Even if we receive marketing approval for any of our therapeutic candidates, we will still be subject to ongoing regulatory obligations and continued review, which may result in significant additional expense. If we fail to comply with United States and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties. Any unfavorable regulatory action may materially and adversely affect our future financial condition and business operations.

Even if we receive marketing and commercialization approval for a therapeutic candidate, we will be subject to continuing post-marketing regulatory requirements. Our potential products, further development activities and manufacturing and distribution of a future product, once developed and determined, will be subject to extensive and rigorous regulation by numerous government agencies, including the FDA and comparable foreign agencies. To varying degrees, each of these agencies monitors and enforces our compliance with laws and regulations governing the development, testing, manufacturing, labeling, marketing, distribution, and the safety and effectiveness of our therapeutic candidates and, if approved, our future products. The process of obtaining marketing approval or clearance from the FDA and comparable foreign bodies for new products, or for enhancements, expansion of the indications or modifications to existing products, could:

•take a significant, indeterminate amount of time;

•require the expenditure of substantial resources;

•involve rigorous preclinical and clinical testing, and possibly post-market surveillance;

•require design changes of our potential products; or

•result in our never being granted the marketing approval we seek.

Any of these occurrences may cause our operations or potential for success to suffer, harm our competitive standing and result in further losses that adversely affect our financial condition.

The FDA, as well as its foreign regulatory counterparts, also have significant post-market authority, including the authority to require labeling changes based on new safety information and to require post-market studies or clinical trials to evaluate safety risks related to the use of a product or to require withdrawal of the product from the market. Additionally, the FDA regulates the promotional claims that may be made about prescription products, such as our products, if approved. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. However, we may share truthful and not misleading information with healthcare providers and payors that is otherwise consistent with the product’s FDA approved labeling.

We will have ongoing responsibilities under these and other FDA and international regulations, both before and after a product is approved and commercially released. Compliance with applicable regulatory requirements is subject to continual review and is monitored rigorously through periodic inspections by the FDA and foreign regulatory agencies. If we or our collaborators, manufacturers or service providers fail to comply with applicable continuing regulatory requirements in the United States or foreign jurisdictions in which we seek to market our products, we or they may be subject to, among other things, fines, warning letters, adverse regulatory inspection finding, holds on

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clinical trials, delay of approval or refusal by the FDA or applicable authorities to approve pending applications or supplements to approved applications, suspension or withdrawal of marketing approval, product recalls and seizures, administrative detention of products, refusal to permit the import or export of products, operating restrictions, exclusion of eligibility from government contracts, injunctions, civil penalties or criminal prosecution. Any adverse regulatory action, depending on its magnitude, may restrict us from effectively commercializing our potential products and harm our business. In addition, negative publicity and product liability claims resulting from any adverse regulatory action could have a material adverse effect on our business, financial condition, results of operations, and prospects.

The FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted outside of their respective jurisdictions. While we currently have partnerships in China designed to provide access to patient populations outside of the United States and in the future may conduct clinical trials in other foreign jurisdictions, there can be no assurance these data will be accepted by the FDA or EMA or other comparable foreign regulatory authorities as a basis for a product’s marketing approval.

To augment our U.S.-centric clinical strategy, we have formed partnerships in China designed to provide access patient populations for clinical trials not readily available in the United States and to facilitate rapid patient enrollment with the goal of generating more robust early clinical data from patients in China. We may in the future pursue partnerships to conduct other clinical trials outside of the United States. The acceptance of study data from clinical trials conducted outside the United States or another jurisdiction by the FDA, EMA or applicable foreign regulatory authority may be subject to certain conditions. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice and (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations. In February 2022, the FDA publicly rebuked an oncology product sponsor for submitting a marketing application with Phase III clinical data solely from China. Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met. Many foreign regulatory bodies have similar approval requirements. In addition, any foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA, EMA or any applicable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction, including any trials conducted in China.

Our partnerships in China subject us to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China.

Under its current leadership, the government of China has been pursuing economic reform policies, including by encouraging foreign trade and investment. However, there is no assurance that the Chinese government will continue to pursue such policies, that such policies will be successfully implemented, that such policies will not be significantly altered, or that such policies will be beneficial to our partnerships in China. China’s system of laws can be unpredictable, especially with respect to foreign investment and foreign trade. The United States government has called for substantial changes to foreign trade policy with China and has raised, and has proposed to further raise in the future, tariffs on several Chinese goods. China has retaliated with increased tariffs on United States goods. Moreover, China’s legislature has recently adopted a national security law to substantially change the way Hong Kong has been governed since the territory was handed over by the United Kingdom to China in 1997. This law increases the power of the central government in Beijing over Hong Kong, limit the civil liberties of residents of Hong Kong and could restrict the ability of businesses in Hong Kong to continue to conduct business or to continue to with business as previously conducted. The U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China. The U.S. State Department has recently enacted sanctions related to China’s governing of Hong Kong, and the United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland China. Any further changes in United States trade policy could trigger retaliatory actions by affected countries, including China, resulting in trade wars. Additionally, the biopharmaceutical industry in particular in China is strictly regulated by the Chinese government. Changes to Chinese regulations affecting biopharmaceutical companies are also unpredictable. Any regulatory changes and changes in United States and China relations may have a material adverse effect on our partnerships in China which could materially harm our business and financial condition.

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Unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives could harm our business in the future.

There is increasing pressure on biotechnology companies to reduce healthcare costs. In the United States, these pressures come from a variety of sources, such as managed care groups and institutional and government purchasers. Increased purchasing power of entities that negotiate on behalf of federal healthcare programs and private sector beneficiaries could increase pricing pressures in the future. Such pressures may also increase the risk of litigation or investigation by the government regarding pricing calculations. The biotechnology industry will likely face greater regulation and political and legal actions in the future.

Adverse pricing limitations may hinder our ability to recoup our investment in one or more future therapeutic candidates, even if our future therapeutic candidates obtain marketing approval. Adverse pricing limitations prior to approval will also adversely affect us by reducing our commercial potential. Our ability to commercialize any potential products successfully also will depend in part on the extent to which coverage and reimbursement for these products and related treatments becomes available from third-party payors, including government health administration authorities, private health insurers and other organizations. Third-party payors decide which medications they will pay for and establish reimbursement levels. In addition, companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics.

A significant trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that coverage and reimbursement will be available for any product that we commercialize in the future and, if reimbursement is available, what the level of reimbursement will be. Reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval in the future. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any therapeutic candidate that we successfully develop.

There may be significant delays in obtaining reimbursement for approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or regulatory authorities in other countries. Moreover, eligibility for reimbursement does not imply that any product will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Payment rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but also have their own methods and approval process apart from Medicare coverage and reimbursement determinations. Accordingly, one third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product. Our inability to promptly obtain coverage and adequate reimbursement from third-party payors for approved products could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize potential products and our overall financial condition.

Healthcare legislative reform measures may have a material and adverse effect on our business, financial condition, results of operations, and prospects.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal, and state levels directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations, and other

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payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

•the demand for our therapeutic candidates, if we obtain marketing approval;

•our ability to receive or set a price that we believe is fair for our products;

•our ability to generate revenue and achieve or maintain profitability;

•the level of taxes that we are required to pay; and

•the availability of capital.

In March 2010, the ACA was enacted, which includes measures that have significantly changed the way healthcare is financed by both governmental and private insurers in the United States. It also included the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. The ACA continues to significantly impact the United States’ pharmaceutical industry.

Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. As an example, in 2020, the FDA finalized a rulemaking to establish a system whereby state governmental entities could lawfully import and distribute prescription drugs sourced from Canada. More recently, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and health care insurance industries. Among other things, the executive order directed the FDA to work towards implementing a system for importing drugs from Canada (following on the Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020). The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry. The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers, or PBMs, and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, such as changes allowing the federal government to directly negotiate drug prices, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement, and new payment methodologies. This could lower the price that we receive for any approved product. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profitability, or commercialize our therapeutic candidates, if approved.

In the European Union similar political, economic and regulatory developments may affect our ability to profitably commercialize our current or any future products. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. Our future products, if any, might not be considered medically reasonable and

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necessary for a specific indication or cost-effective by third-party payors, an adequate level of reimbursement might not be available for such products and third-party payors’ reimbursement policies might adversely affect our ability to sell any future products profitably.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for biologic therapeutics. For example, on December 20, 2019, President Trump signed P.L. 116-94 that includes a piece of bipartisan legislation called the CREATES Act. The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products to deny generic and biosimilar product developers access to samples of brand products. Whether and how generic and biosimilar product developers will use this new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on the U.S. biopharmaceutical industry are unknown. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our therapeutic candidates, if any, may be. Furthermore, the next FDA reauthorization package is currently being negotiated and is due to be finalized by Congress in 2022, while several other FDA-related changes are also being proposed in Congress, including within a “Cures 2.0” bill that is likely to have bipartisan support. Increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-approval testing and other requirements.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our therapeutic candidates may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

If we or our partners, manufacturers or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to develop, market and sell our products and may harm our reputation.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any therapeutic candidates for which we may obtain marketing approval. Our current and future arrangements with healthcare providers, third-party payors and customers expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our therapeutic candidates for which we obtain marketing approval. In addition, we may be subject to patient data privacy and security regulation by both the U.S. federal government and the states in which we conduct our business. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

•the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind to induce or reward either the referral of an individual for, or the purchase, or order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

•the federal civil and criminal false claims laws, including the U.S. federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions, and the civil monetary penalties laws, which prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the U.S. federal False Claims Act;

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•HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

•the U.S. federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to HHS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors and certain advanced non-physician healthcare practitioners) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and

•analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information; state and local laws that require the registration of pharmaceutical sales representatives; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Ensuring that our future business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any such requirements, we may be subject to significant civil, criminal and administrative penalties, including monetary damages, fines, disgorgements, imprisonment, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, reputational harm, diminished profits and future earnings, additional reporting requirements if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with any of these laws, and the curtailment or restructuring of our operations, any of which could adversely our financial results. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our management’s attention from the operation of our business, even if our defense is successful. In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time and resources.

We received orphan drug status for INBRX-109 for the treatment of patients with metastatic or unresectable chondrosarcoma. We may seek orphan drug status for additional therapeutic candidates, but even if it is granted, we may be unable to maintain any benefits associated with orphan drug status, including market exclusivity.

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition or for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for a disease or condition will be recovered from sales in the United States for that drug or biologic. If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

We received orphan drug status for INBRX-109 for the treatment of patients with metastatic or unresectable chondrosarcoma. We may seek orphan drug status for additional therapeutic candidates, but the FDA may not

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approve any such request. Even with orphan drug status, exclusive marketing rights in the United States may be limited if we seek FDA marketing approval for an indication broader than the orphan designated indication. Additionally, any therapeutic candidate that initially receives orphan drug status designation, may lose such designation if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. In addition, others may obtain orphan drug status for products addressing the same diseases or conditions as products we are developing, thus limiting our ability to compete in the markets addressing such diseases or conditions for a significant period of time.

We received fast-track designation for INBRX-109 for the treatment of patients with metastatic or unresectable chondrosarcoma. We may seek fast-track designation for other of our therapeutic candidates. Even if received, fast-track designation may not actually lead to a faster review process.

We aim to benefit from the FDA’s fast track and priority review processes. We received fast-track designation for INBRX-109 for the treatment of patients with metastatic or unresectable chondrosarcoma. Under fast-track designation, the FDA may initiate a rolling review of sections of a fast-track drug’s BLA before the application is complete. However, the FDA’s time period goal for reviewing an application does not begin until the last section of the BLA is submitted. Additionally, the fast-track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Under the FDA policies, a drug candidate is eligible for priority review, or review within a six-month time frame from the time a complete BLA is accepted for filing, if the drug candidate provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease. A fast-track designated drug candidate would ordinarily meet the FDA’s criteria for priority review.

The fast-track designation for INBRX-109, or for other future therapeutic candidates, may not actually lead to a faster review process and a delay in the review process or in the approval of our potential products will delay revenue from their potential sales and will increase the capital necessary to fund these product development programs. Without fast-track designation, submitting a BLA and getting through the regulatory process to gain marketing approval is a lengthier process.

Our therapeutic candidates for which we intend to seek approval may face competition sooner than anticipated.

Even if we are successful in achieving marketing approval to commercialize a therapeutic candidate ahead of our competitors, our future therapeutic candidates may face direct competition from biosimilar products. In the United States, our therapeutic candidates are regulated by the FDA as biological products and we intend to seek approval for these therapeutic candidates pursuant to the BLA pathway. The BPCIA created an abbreviated pathway for the FDA approval of biosimilar biological products based on a previously licensed innovator, or reference, biological product. Under the BPCIA, an application for a biosimilar biological product cannot be approved by the FDA until 12 years after the original reference biological product was approved under a BLA. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when such processes intended to implement BPCIA may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our therapeutic candidates.

We believe that any of our therapeutic candidates approved as a biological product under a BLA should qualify for the 12-year period of exclusivity available to reference biological products. However, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider our therapeutic candidates to be reference biological products pursuant to its interpretation of the exclusivity provisions of the BPCIA, potentially creating the opportunity for follow-on biosimilar competition sooner than anticipated. Moreover, the extent to which a biosimilar product, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing including whether a future competitor seeks an interchangeability designation for a biosimilar of one of our products. Under the BPCIA as well as state pharmacy laws, only so-called “interchangeable” biosimilar products are considered substitutable for the reference biological product without the intervention of the healthcare provider who prescribed the original biological product. However, as with all prescribing decisions made in the context of a patient-provider relationship and a patient’s specific medical needs, healthcare providers are not restricted from prescribing biosimilar products in

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an off-label manner. In addition, a competitor could decide to forego the abbreviated approval pathway available for biosimilar products and to submit a full BLA for product licensure after completing its own preclinical studies and clinical trials. In such a situation, any exclusivity to which we may be eligible under the BPCIA would not prevent the competitor from marketing its biological product as soon as it is approved.

In Europe, the European Commission has granted marketing authorizations for several biosimilar products pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In addition, companies may be developing biosimilar products in other countries that could compete with our products, if approved.

If competitors are able to obtain marketing approval for biosimilars referencing our therapeutic candidates, if approved, our future products may become subject to competition from such biosimilars, whether or not they are designated as interchangeable, with the attendant competitive pressure and potential adverse consequences. Such competitive products may be able to immediately compete with us in each indication for which our therapeutic candidates may have received approval.

We face regulation and potential liability related to the privacy, data protection and information security which may require significant resources and may adversely affect our business, operations and financial performance.

The regulatory environment surrounding information security, data collection and privacy is increasingly demanding. We are subject to numerous U.S. federal and state laws and non-U.S. regulations, including in Europe and China, governing the protection of personal and confidential information of our clinical subjects, clinical investigators, employees and vendors/business contacts, including in relation to medical records, credit card data and financial information. In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act and CCPA), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators, and the privacy regulatory area is in constant flux. The state of California, for example, has adopted the CCPA, which went into effect beginning in January 2020. The CCPA has been characterized as the first “GDPR-like” privacy statute to be enacted in the United States because it mirrors a number of the key provisions of the GDPR. The CCPA establishes a new privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for residents of the State of California, imposing special rules on the collection of personal information from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches. In November of 2020, California voters approved the CPRA, which will take full effect in January of 2023. The CPRA modifies the CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses in an effort to comply, and additional harm and liability for failure to comply. Among other things, the CPRA established a new regulatory authority, the California Privacy Protection Agency, which will be enacting new regulations and will have expanded enforcement authority. Virginia and Colorado enacted similar data protection laws in 2021, and other U.S. states have proposals under consideration, increasing the regulatory compliance risk.

In the European Union, or EU, the GDPR, which came into effect on May 25, 2018, could increase our burden of regulatory compliance. The GDPR implements more stringent operational requirements for processors and controllers of personal data, including, for example, requiring expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements, and higher standards for data controllers to demonstrate that they have obtained either valid consent or have another legal basis in place to justify their data processing activities. The GDPR further provides that EU member states may make their own additional laws and regulations in relation to certain data processing activities, which could further limit our ability to use and share personal data and could require localized changes to our operating model. Under the GDPR, fines of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, may be assessed for noncompliance, which significantly increases our potential financial exposure for non-compliance.

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We will be subject to the GDPR where we have a European Union presence or “establishment” (e.g. European Union based subsidiary or operations), when conducting clinical trials with European Union based data subjects (whether the trials are conducted directly by us or through a clinical vendor or partner) or offering approved products or services (if relevant) to European Union based data subjects (regardless of whether involving our European Union based subsidiary or operations).

The GDPR sets out a number of requirements that must be complied with when handling the personal data of such European Union based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g. access requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; the new mandatory data breach regime. In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify an individual are all classified as “special category” data under the GDPR and afford greater protection and require additional compliance obligations. Further, European Union member states have a broad right to impose additional conditions—including restrictions—on these data categories. This is because the GDPR allows European Union member states to derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes). As the European Union states continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant European Union member states’ laws and regulations, including where permitted derogations from the GDPR are introduced.

We will also be subject to evolving European Union laws on data export, where we transfer data outside the European Union to group companies or third parties. The GDPR only permits exports of data outside the European Union where there is a suitable data transfer solution in place to safeguard personal data (e.g. the European Union Commission approved Standard Contractual Clauses). On July 16, 2020, the Court of Justice of the European Union or the CJEU, issued a landmark opinion in the case Maximilian Schrems vs. Facebook (Case C-311/18), called Schrems II. This decision (a) calls into question certain data transfer mechanisms as between the European Union member states and the U.S. (such as the Standard Contractual Clauses) and (b) invalidates the EU-U.S. Privacy Shield on which many companies had relied as an acceptable mechanism for transferring such data from the EU to the U.S. The CJEU is the highest court in Europe and the Schrems II decision heightens the burden on data importers to assess U.S. national security laws on their business and future actions of European Union data protection authorities are difficult to predict at the early date. Consequently, there is some risk of any of our data transfers from the European Union being halted.

Where we rely on third parties to carry out a number of services for us, including processing personal data on our behalf, we are required under GDPR to enter into contractual arrangements to help ensure that these third parties only process such data according to our instructions and have sufficient security measures in place. Any security breach or non-compliance with our contractual terms or breach of applicable law by such third parties could result in enforcement actions, litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse impact on our reputation and business. Any contractual arrangements requiring the transfer of personal data from the European Union to us in the United States will require greater scrutiny and assessments as required under Schrems II and may have an adverse impact on cross-border transfers of personal data, or increase costs of compliance.

Our partnerships in China and our CRO relationships in Hong Kong may expose us to new and stringent Chinese data security laws. The Data Security Law of the People’s Republic of China, or the PRC Data Security Law, took effect on September 1, 2021. The PRC Data Security Law requires data processing, which includes the collection, storage, use, processing, transmission, provision and publication of data, to be conducted in a legitimate and proper manner. Moreover, the PRC Data Security Law provides a national security review procedure for those data processing activities which affect or may affect national security and imposes export restrictions on certain data and information. In addition, the PRC Data Security Law also provides that any organization or individual within the territory of the PRC shall not provide any foreign judicial body and law enforcement body with any data stored in the territory of the PRC without the approval of the competent PRC governmental authorities.

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In recent years, U.S. and European lawmakers and regulators have expressed concern over electronic marketing. In the European Union, marketing is defined broadly to include any promotional material and the rules specifically on e-marketing are currently set out in the ePrivacy Directive which will be replaced by a new ePrivacy Regulation. While the ePrivacy Regulation was originally intended to be adopted on May 25, 2018 (alongside the GDPR), it is still going through the European legislative process and commentators now expect it to be adopted in 2021. The current draft of the ePrivacy Regulation imposes strict opt-in e-marketing rules with limited exceptions to business to business communications and significantly increases fining powers to the same levels as GDPR (see above).

We may find it necessary or desirable to join self-regulatory bodies or other privacy-related organizations, particularly relating to biopharmacy and/or scientific research that may require compliance with their rules pertaining to privacy and data security.

The introduction of the GDPR, and any resultant changes in European Union member states’ national laws and regulations and the ePrivacy Regulation, will increase our compliance obligations and will necessitate the review and implementation of policies and processes relating to our collection and use of data. This increase in compliance obligations could also lead to an increase in compliance costs which may have an adverse impact on our business, financial condition or results of operations.

If any person, including any of our employees, clinical vendors or partners or those with whom we share such information, negligently disregards or intentionally breaches our established controls with respect to our clinical subject, clinical investigator or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. As above, under the GDPR there are significant new punishments for non-compliance which could result in a penalty of up to 4% of a firm’s global annual revenue.

Applicable laws may conflict with each other, and by complying with the laws or regulations of one jurisdiction, we may find that we are violating the laws or regulations of another jurisdiction. Despite our efforts, we may not have fully complied in the past and may not in the future. If we become liable under laws or regulations applicable to us, we could be required to pay significant fines and penalties, our reputation may be harmed and we may be forced to change the way we operate. That could require us to incur significant expenses or to discontinue certain services, which could negatively affect our business.

We are increasingly dependent upon technology systems and data to operate our business. In particular, the COVID-19 pandemic has caused us to modify our business practices, including in certain cases allowing office-based employees in the United States to work from home. As a result, we are increasingly dependent upon our technology systems to operate our business and our ability to effectively manage our business depends on the security, reliability and adequacy of our technology systems and data, which includes use of cloud technologies. A breakdown, invasion, corruption, destruction or breach of our technology systems, including the cloud technologies that we utilize, and/or unauthorized access to our data and information could subject us to liability or negatively impact the operation of our business. Our technology systems, including the cloud technologies that we utilize, continue to increase in multitude and complexity, making them potentially vulnerable to breakdown, malicious intrusion and random attack. Likewise, data privacy or security breaches by individuals authorized to access our technology systems, including the cloud technologies that we utilize, may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to us, our patients, customers or other business partners, may be exposed to unauthorized persons or to the public.

Cyber-attacks are increasing in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect. They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of our technology systems and data. Our key business partners face similar risks and any security breach of their systems could adversely affect our security posture. In addition, our increased use of cloud technologies could heighten these and other operational risks, and any failure by cloud technology service providers to adequately

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safeguard their systems and prevent cyber-attacks could disrupt our operations and result in misappropriation, corruption or loss of confidential or propriety information.

While we continue to build and improve our systems and infrastructure, including our business continuity plans, there can be no assurance that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business, operational or reputational harm to us, loss of competitive advantage or loss of consumer confidence. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches. Further, a data breach could result in negative publicity which could damage our reputation and have an adverse effect on our business, financial condition or results of operations.

We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business.

We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We may engage third parties to sell our products sell our products outside the United States, to conduct clinical trials, and/or to obtain necessary permits, licenses, patent registrations, and other marketing approvals. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors, and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

Use of net operating loss carryforwards may be limited and U.S. federal income tax reform could adversely affect us.

Our ability to utilize our net operating loss, or NOL, carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes. Corresponding rules may apply under state tax laws. We have not yet determined the amount of the cumulative change in our ownership resulting from the initial public offering of our common stock, or our IPO, or other transactions, or any resulting limitations, if any, on our ability to utilize our NOL carryforwards and other tax attributes. Even if there is no limitation on utilization of our NOL carryforwards as the result of an ownership change, the utilization of NOL carryforwards originating from a loss incurred in a year after 2017 is limited and may reduce taxable income in any post-2020 year by no more than 80% of the pre-NOL taxable income in such year. If we earn taxable income in a future year, such limitations on utilization of NOL carryforwards could result in increased future tax liability to us and our future cash flows could be adversely affected.

New legislation or regulation which could affect our tax burden could be enacted by any governmental authority. We cannot predict the timing or extent of such tax-related developments which could have a negative impact on our financial results. United States federal legislation affecting the tax laws was enacted in December 2017 (the TCJA), March 2020 (the Families First Coronavirus Response Act), and again in March 2020 (the CARES Act). We cannot estimate how the changes in tax law from this legislation will affect our tax liability in future years, but we have recorded a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets.

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Additionally, we use our best judgment in attempting to quantify and reserve for these tax obligations. However, a challenge by a taxing authority, our ability to utilize tax benefits such as carryforwards or tax credits, or a deviation from other tax-related assumptions may cause actual financial results to deviate from previous estimates.

If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.

We maintain quantities of various flammable and toxic chemicals in our facilities in La Jolla, California required for our research and development activities. We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. We believe our procedures for storing, handling and disposing these hazardous materials in our La Jolla facilities comply with the relevant guidelines of La Jolla, the state of California and the Occupational Safety and Health Administration of the U.S. Department of Labor. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of animals and biohazardous materials. Any insurance coverage we have may not be sufficient to cover these liabilities. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations which would adversely affect our business.

Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future growth may depend, in part, on our ability to develop and commercialize our therapeutic candidates, if approved, in foreign markets for which we may rely on collaboration with third parties. We are not permitted to market or promote any of our therapeutic candidates before we receive marketing approval from the applicable regulatory authority in that foreign market, and we may never receive such marketing approval for any of our therapeutic candidates. To obtain separate marketing approval in many other countries we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of our therapeutic candidates, and we cannot predict success in these jurisdictions. If we obtain approval of our therapeutic candidates and ultimately commercialize our therapeutic candidates in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and the reduced protection of intellectual property rights in some foreign countries. We may need to rely on third parties to market, distribute and sell our products in foreign markets.

Risks Related to Ownership of Our Common Stock

We do not know whether an active, liquid and orderly trading market will continue for our common stock and as a result it may be difficult for you to sell your shares of our common stock.

Prior to our IPO in August 2020, there was no public market for shares of our common stock. Shares of our common stock only recently began trading on the Nasdaq Global Market and we can provide no assurance that we will be able to sustain an active trading market for our shares. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. Furthermore, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic collaborations or acquire companies, technologies or other assets by using our shares of common stock as consideration.

We expect that our stock price may fluctuate significantly.

The trading price of shares of our common stock may be highly volatile and could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

•results of our clinical trials and preclinical studies or those of our competitors;

•the success of competitive products or technologies;

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•regulatory or legal developments in the United States and other countries;

•the level of expenses related to our therapeutic candidates or development programs;

•changes in the structure of healthcare payment systems; actual or anticipated fluctuations in our financial condition and operating results;

•announcements by us, our partners or our competitors of new therapeutics or therapeutic candidates, significant contracts, strategic partnerships, joint ventures, collaborations, commercial relationships or capital commitments;

•failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

•issuance of new or updated research or reports by securities analysts or recommendations for our stock;

•disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

•commencement of, or our involvement in, litigation;

•fluctuations in the valuation of companies perceived by investors to be comparable to us;

•manufacturing disputes or delays;

•any future sales of our common stock or other securities;

•any change to the composition of the board of directors or key personnel;

•expiration of contractual lock-up agreements with our executive officers, directors and security holders;

•general economic conditions and slow or negative growth of our markets;

•share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

•announcement or expectation of additional debt or equity financing efforts; and

•circumstances and market conditions relating to the COVID-19 pandemic.

These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance. In addition, the stock market in general, and life science companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. In the past, when the market price of a stock has been volatile, holders of that stock have on occasion instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our operating results.

Our executive officers, directors and holders of more than 5% of our capital stock own a significant percentage of our stock and will be able to exercise significant control over matters subject to stockholder approval.

As of December 31, 2021, our executive officers, directors and holders of more than 5% of our capital stock beneficially owned approximately 46.1% of our shares of common stock outstanding. Accordingly, this group of stockholders will continue to have significant control over our operations. This concentration of ownership could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on our stock price and may prevent attempts by our stockholders to replace or remove the board of directors or management.

Future sales of our common stock in the public market could cause our stock price to fall.

Our stock price could decline as a result of sales of a large number of shares of our common stock or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

As of December 31, 2021, we had 38,991,307 shares of common stock outstanding. In order to raise additional capital, we may sell shares of common stock under our Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which we may, from time to time, sell shares of common stock having an aggregate offering price of up to $200.0 million through the Sales Agent. As of December 31, 2021, shares of common stock with an aggregate offering price of $41.4 million have been sold through our Sales Agent pursuant to the Sales Agreement. Sales of our common stock made pursuant to the Sales Agreement will be made under our $400.0 million Shelf Registration on Form S-3ASR, which became automatically effective upon filing on September 3, 2021. We cannot predict what effect, if any, sales of our shares in the public market or the availability of shares

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for sale will have on the market price of our common stock. However, future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of then outstanding options or warrants, or the perception that such sales may occur, could adversely affect the market price of our common stock.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, and licensing arrangements. We, and indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Additionally, any future collaborations we enter into with third parties may provide capital in the near term but limit our potential cash flow and revenue in the future. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

If securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of the analysts who cover us issues an adverse opinion about our company, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the public markets, which could cause our stock price or trading volume to decline.

The Nasdaq Stock Market may delist our securities from its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our common stock is listed on the Nasdaq Global Market. We cannot assure you that, in the future, our securities will meet the continued listing requirements to be listed on the Nasdaq Global Market. If the Nasdaq Stock Market delists our common stock, we could face significant material adverse consequences, including:

•a limited availability of market quotations for our securities;

•a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

•a limited amount of news and analyst coverage for our company; and

•a decreased ability to issue additional securities or obtain additional financing in the future.

We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. The Amended 2020 Loan Agreement, and future debt financing agreements may require us to have the lender’s permission before declaring dividends on our common stock. Any return to stockholders will therefore be limited to the appreciation of their stock.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our

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financial statements and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, our management will be required to report upon the effectiveness of our internal control over financial reporting beginning in the year following the first required annual report.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. To comply with the requirements of being a reporting company under the Securities and Exchange Act of 1934, as amended, or the Exchange Act, we will need to implement additional financial and management controls, reporting systems and procedures.

We cannot assure you that there will not be material weaknesses or significant deficiencies identified in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. In the future, if we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

We lost our status as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act and effective December 31, 2021, became a “large accelerated filer,” as defined in the Exchange Act. As a result, our independent registered public accounting firm is now required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

We will continue to incur significantly increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or

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increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

Anti-takeover provisions contained in our restated certificate of incorporation and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Our restated certificate of incorporation, restated bylaws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors. Our corporate governance documents include provisions:

•authorizing our board of directors to issue up to 15,000,000 shares of preferred stock without stockholder approval upon the terms and conditions and with the rights, privileges and preferences as our board of directors may determine;

•specifying that special meetings of our stockholders can be called only by our board of directors, the chairman of our board of directors or our Chief Executive Officer and that our stockholders may not act by written consent;

•establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

•providing that our board of directors may create new directorships and that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

•establishing that our board of directors is divided into three classes—Class I, Class II, and Class III—with each class serving staggered three-year terms;

•providing that our board of directors may amend our restated bylaws without stockholder approval; and

•requiring a super-majority of votes to amend certain of the above-mentioned provisions.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock.

Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation designates, the Court of Chancery of the State of Delaware, or the Chancery Court, or the federal district court for the District of Delaware, or the District Court of Delaware, or the other federal district courts of the United States as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation requires, unless we otherwise consent, that the Chancery Court will, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law (subject to the Chancery Court having personal jurisdiction over the indispensable parties named as defendants): (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers and employees to us or our stockholders, (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers or employees of the Company, arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws, (v) any action or

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proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Chancery Court, or (vi) any action or proceeding asserting a claim against us, or our directors, officers or employees, governed by the internal affairs doctrine. If the Chancery Court does not have jurisdiction for these actions or proceedings, then the actions or proceedings must be brought in a state court located in the State of Delaware. If these state courts also do not have jurisdiction, these actions or proceedings must be brought in the District Court of Delaware. These limitations in our amended and restated certificate of incorporation will not apply to actions brought to enforce a duty or liability created by the Securities Act, the Exchange Act or to any claim for which the federal courts have exclusive jurisdiction. However, our amended and restated certificate of incorporation also provides that, unless we otherwise consent in writing, the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. In addition, any person holding, owning or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate of incorporation. These Delaware and federal court choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders. Stockholders who do bring a claim in the Chancery Court or the District Court of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the jurisdiction. The Chancery Court or the District Court of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs, which could have a material adverse effect on our business, financial condition or results of operations.

On March 18, 2020, the Delaware Supreme Court ruled that provisions of a Delaware corporation’s certificate of incorporation that designate a federal forum for securities claims brought pursuant to the Securities Act, or federal forum provisions, are valid and enforceable under Delaware law, or the March 2020 Ruling. Various U.S. Supreme Court cases offer support for the argument that federal forum provisions do not violate federal policy. However, the March 2020 Ruling applies only to claims brought in Delaware state courts, and it is not binding on any other state court or the federal courts. Therefore, we are unable to predict whether a state court in any other state or a federal court would enforce a federal forum provision such as the one set forth in our amended and restated certificate of incorporation.

We may be subject to securities litigation, which is expensive and could divert management attention.

The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our headquarters are located in La Jolla, California where we currently lease approximately 43,000 square feet of laboratory and office space under a lease that expires in 2025. We have an option to extend the lease an additional five years. We believe that this space is sufficient to meet our needs for the foreseeable future and that any additional space we may require will be available on commercially reasonable terms.

Item 3. Legal Proceedings.

We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

Item 4. Mine Safety Disclosures.

Not applicable.

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Part II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock began trading on the Nasdaq Global Market in August 2020 under the ticker symbol “INBX.”

Holders of Common Stock

As of February 21, 2022, we had 39,025,644 outstanding shares of common stock and approximately 120 holders of record of our common stock. The approximate number of holders is based upon the actual number of holders registered in our records at such date and excludes holders in “street name” or persons, partnerships, associations, corporations, or other entities identified in security positions listings maintained by depository trust companies.

Dividend Policy

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, for use in the operation of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future determination to declare and pay dividends will be made at the discretion of our board of directors and will depend on various factors, including applicable laws, our results of operations, our financial condition, our capital requirements, general business conditions, our future prospects and other factors that our board of directors may deem relevant. In addition, the terms of the Amended 2020 Loan Agreement restrict our ability to pay dividends without the prior written consent of Oxford. Investors should not purchase our common stock with the expectation of receiving cash dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 of Part III of this Annual Report for information about our equity compensation plans which is incorporated by reference herein.

Recent Sales of Unregistered Securities

None.

Use of Proceeds

On August 18, 2020, the SEC declared effective our registration statement on Form S-1 (File No. 333-240135), as amended, filed in connection with our IPO. Our IPO closed on August 21, 2020, and we issued and sold 8,050,000 shares of our common stock at a price to the public of $17.00 per share, which included the exercise in full of the underwriters’ option to purchase additional shares. We received gross proceeds from our IPO of $136.9 million, before deducting underwriting discounts, commissions and offering costs of $11.0 million, for net proceeds of approximately $125.9 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning ten percent or more of any class of our equity securities or to any other affiliates.

The joint book-running managing underwriters of the offering were Jefferies LLC, Evercore Group L.L.C. and Credit Suisse Securities (USA) LLC, with LifeSci Capital as Co-Manager.

Upon receipt, the net proceeds from our IPO were held in cash and cash equivalents, primarily bank deposits and money market funds. Through December 31, 2021, we have used a portion of the net proceeds from our IPO for research and development of our programs and for general corporate purposes. There has been no material change in the planned use of proceeds from our IPO from those disclosed in the Prospectus.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

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Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the section of this Annual Report titled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biotechnology company with a pipeline of novel biologic therapeutic candidates, developed using our protein engineering expertise and proprietary sdAb platform. Our sdAb platform allows us to pursue validated targets with clinical promise, but where other antibody and biologic based approaches have failed. Highly modular, our sdAbs can be combined with precise valencies and multiple specificities, creating therapeutic candidates designed to be capable of enhanced cell signaling, conditional activation or combined synergistic functions.

We currently have four programs in ongoing clinical trials. Three of these programs are for the treatment of various cancers, and one for the treatment of AATD. INBRX-101 is an optimized, recombinant AAT augmentation therapy candidate for AATD. In October 2021, we announced interim results from the Phase 1 clinical trial. The data from the SAD cohorts revealed the potential to achieve normal AAT levels with monthly dosing and also showed a favorable safety and tolerability profile with no drug-related severe or serious adverse events at doses up to and including 120 mg/kg single dose and 80 mg/kg multi-dose administered intravenously.

Our most advanced therapeutic candidate, INBRX-109, is a tetravalent DR5 agonist currently being evaluated in patients diagnosed with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma and pancreatic adenocarcinoma. We submitted an amended Investigational New Drug Application, or IND, to the FDA for INBRX-109 in April 2021 and initiated a potentially registration-enabling trial evaluating INBRX-109 in patients diagnosed with conventional chondrosarcoma in June 2021. INBRX-106 is a hexavalent OX40 agonist, currently being investigated as a single agent and in combination with Keytruda, a PD-1 blocking checkpoint inhibitor, in patients with locally advanced or metastatic solid tumors. Both of the INBRX-109 and INBRX-106 programs are designed to achieve target agonism through precise control of therapeutic valency. INBRX-105 is a conditional 4-1BB agonist that is currently being investigated as a single agent and in combination with Keytruda in patients with locally advanced or metastatic solid tumors. We anticipate additional data releases from all four of our clinical programs over the next year.

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We have developed a diverse pipeline of therapeutic candidates that are specifically designed to leverage the power of our core sdAb platform and protein engineering expertise, as shown below:

INBRX-101	INBRX-109	INBRX-106	INBRX-105
AAT-Fc fusion protein	Tetravalent DR5 agonist	Hexavalent OX40 agonist	PD-L1x4-1BB tetravalent conditional agonist

Program	Therapeutic Area	Target(s)/Format	STAGE OF DEVELOPMENT
			Preclinical	Phase 1	Phase 2	Phase 3
INBRX-101*	Orphan/Respiratory	Neutrophil Elastase AAT-Fusion Protein
INBRX-109**	Oncology	DR5 Tetravalent Agonist
INBRX-106***	Oncology	OX40 Hexavalent Agonist
INBRX-105***	Oncology	PD-L1 x 4-1BB Tetravalent Conditional Agonist

__________________

*    Commercialization and development rights outside of the United States and Canada, subject to an option agreement with Chiesi

**    Third party partnership with Transcenta, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

***    Third party partnership with Elpiscience, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

Liquidity and Capital Resources

Sources of Liquidity

In August 2020, we completed our IPO of 8,050,000 shares of our common stock at a price to the public of $17.00 per share, which included the exercise in full by the underwriters of their option to purchase 1,050,000 additional shares of our common stock. Our aggregate net proceeds from the offering were $125.9 million, net of underwriting discounts, commissions and offering costs.

Other sources of capital raised to fund our operations have been comprised of the sale of equity securities, payments received from commercial partners for licensing rights to our therapeutic candidates under development and grants, the 2020 Loan Agreement with Oxford, including $10.0 million of gross proceeds borrowed in July 2020, and

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proceeds from the sale and issuance of convertible promissory notes in May 2019 and April 2020, or the 2019 Note and the 2020 Notes, respectively. In November 2020 and June 2021, we amended the 2020 Loan Agreement which provided for two additional tranches of term loans, including $20.0 million of gross proceeds received in November 2020, and an additional $40.0 million of gross proceeds in June 2021. In February 2022, we further amended the 2020 Loan Agreement which provided for four additional tranches of term loans, including $40.0 million of gross proceeds received in February 2022, with an additional $90.0 million to be funded in three future tranches.

In September 2021, we entered into the Sales Agreement, with the Sales Agent, under which we may, from time to time, sell shares of common stock having an aggregate offering price of up to $200.0 million through the Sales Agent. Sales of our common stock made pursuant to the Sales Agreement will be made under our $400.0 million Shelf Registration on Form S-3ASR, which became automatically effective upon filing on September 3, 2021. As of December 31, 2021, we have sold 921,042 shares of common stock under the Sales Agreement for net proceeds of $40.2 million, after deducting commissions.

Future Funding Requirements

Since our inception, we have devoted substantially all of our efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of our therapeutic candidates, hiring to support our research and development activities and financial reporting capabilities, establishing our intellectual property portfolio, and raising capital to support and expand these activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

Our net loss for the years ended December 31, 2021 and 2020 was $81.8 million and $76.1 million, respectively. As of December 31, 2021, we had an accumulated deficit of $227.1 million and cash and cash equivalents of $131.3 million. Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date these consolidated financial statements are issued. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

The process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses to increase as we continue our development of, and seek marketing approvals for, our therapeutic candidates (especially as we move more candidates from preclinical to clinical development as well as study candidates in later stages of clinical development), and begin to commercialize any approved products, if ever. If we elect to proceed with the commercialization of any of our product candidates, we would incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We also expect our general and administrative expenses and losses to increase as we hire additional personnel and incur increased accounting, audit, legal, regulatory, and compliance costs, and as we incur increased costs from investor and public relations expenses associated with operating as a public company.

Until such time, if ever, we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaboration or other similar agreements. However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future. If we are unable to secure adequate additional funding, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our intellectual property on less favorable terms than we would otherwise choose. These actions could materially impact our business, results of operations, financial condition, and prospects.

Our future liquidity and capital funding requirements will depend on numerous factors, including:

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•the outcome, costs and timing of preclinical studies and clinical trials for our current or future therapeutic candidates;

•whether and when we are able to obtain marketing approval to market any of our therapeutic candidates;

•our ability to successfully commercialize any therapeutic candidates that receive marketing approval;

•the emergence and effect of competing or complementary therapeutics or therapeutic candidates;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

•our ability to retain our current employees and the need and ability to hire additional management and scientific and medical personnel;

•the terms and timing of any strategic licensing, collaboration or other similar agreement that we have or may establish;

•our ability to repay, refinance or restructure our indebtedness when payment is due, including in the event such indebtedness is accelerated;

•the valuation of our capital stock; and

•the continuing or future effects of the COVID-19 pandemic and related uncertainties on capital and financial markets.

We do not own or operate manufacturing facilities for the production of any of our therapeutic candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely on a limited number of third-party contract manufacturers for all of our required raw materials, antibodies, and other biologics for our preclinical research, clinical trials, and if and when applicable, commercial product, and employ internal resources to manage our manufacturing relationships with these third parties.

Commitments

Our material cash requirements from known contractual and other obligations primarily relate to our lease obligations, debt, and services provided by our CROs and CDMOs.

We have two leases for our laboratory and office space, which expire in 2025, with an option to extend an additional five years. As of December 31, 2021, we have future minimum rental obligations under these leases of $7.7 million, of which $2.2 million and $5.5 million are current and non-current, respectively. For more information regarding these lease agreements, refer to Note 10 to the consolidated financial statements.

Under the Amended 2020 Loan Agreement, we are required to make only interest payments through 2024, with all principal payments and final fee payments beginning in 2025. As of December 31, 2021, we have an obligation of $96.1 million of long-term debt, including interest, of which $5.7 million and $90.4 million are current and non-current, respectively. For more information regarding the 2020 Loan Agreement, refer to Note 3 to the consolidated financial statements.

We enter into contracts in the normal course of business with CROs related to our ongoing preclinical studies and clinical trials with CDMOs for clinical supplies and manufacturing scale-up activities. These contracts are generally cancellable, with notice, at our option. We have recorded accrued expenses of approximately $7.4 million in our consolidated balance sheets for expenditures incurred by CROs and CDMOs as of December 31, 2021.

While these contracts are generally cancellable, some may contain specific activities that involve one or more non-cancellable commitments, including minimum purchase commitments, binding annual forecasts, and capital equipment investments. Additionally, depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from the cost of work performed to date up to twelve months of future committed manufacturing costs. As of December 31, 2021, the non-cancellable portion of these contracts total in aggregate, excluding amounts recorded in accounts payable and accrued expenses as of this date, approximately $2.4 million.

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License and Collaboration Agreements

Celgene Agreement

On July 1, 2013, we entered into the Celgene Agreement, pursuant to which we granted Celgene the Celgene Licensed Intellectual Property. Per the terms of the Celgene Agreement, Celgene is operationally and financially responsible for the development, manufacturing and commercialization activities of Celgene Licensed Intellectual Property and any additional related antibodies covered by the Celgene Agreement.

As payment for the license granted in the Celgene Agreement, we may be eligible to receive development and regulatory milestones of an aggregate of $934.1 million, assuming the achievement of all potential milestones in the Celgene Agreement, as well as percentage tiered royalties based on future worldwide sales, with rates ranging between the high single-digits and low teens, subject to potential reduction when and if comparable third party products attain certain levels of competitive market share (on a country-by-country basis) and, subject to certain limitations, payments to third parties for third-party intellectual property rights. We are obligated to pay 2% of future amounts received under the Celgene Agreement to advisors who assisted us with the negotiations and other matters in connection with the Celgene Agreement.

2seventy bio Agreements

On December 20, 2018, we entered into an exclusive license agreement with bluebird to research, develop and commercialize CAR T-cell therapies using our proprietary sdAb platform. In November 2021, bluebird assigned the 2018 2seventy Agreement to its affiliate 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under the terms of this license agreement, we will provide 2seventy the exclusive worldwide rights to develop, manufacture and commercialize certain cell therapy products containing sdAbs directed to various cancer targets. In January 2019, we received a $7.0 million payment and pursuant to the license agreement, we are entitled to receive developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single digits. In August 2021, we received a $2.0 million milestone payment under this agreement.

On June 9, 2020, we entered into the 2020 2seventy Agreement, was also assigned to 2seventy in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy. We received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and we are entitled to an upfront option fee for each additional program. We also granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under the 2020 2seventy Agreement, which entitles us to additional fees upon exercise of the option. We are also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. In August 2021, pursuant to the option exercise terms in the agreement, bluebird exercised its option to exclusively license one of the initial programs in exchange for an option exercise fee of $2.1 million, the payment of which was received in October 2021.

Chiesi

In May 2019, we entered into the Chiesi Option Agreement. Under this agreement, we granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Under the terms of the Chiesi Option Agreement, we received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. Pursuant to the Chiesi Option Agreement, we are performing research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by the Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the Company’s delivery to Chiesi of the finalized minutes from the definitive FDA scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel EMA-HTA scientific advice meeting conducted following completion of such Phase I Clinical Trial.

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If Chiesi chooses to exercise its option under the Chiesi Option Agreement, we will receive a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, we may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

Other Collaboration Agreements

In addition to these contracts, we have entered into strategic collaborations with other third parties, including Phylaxis BioScience, LLC, or Phylaxis, Transcenta, and Elpiscience. For more information regarding these agreements, refer to Note 7 to the consolidated financial statements.

Components of Results of Operations

Revenue

To date, all of our revenue has been derived from licenses with collaboration partners and grant awards. We have not generated any revenue from the commercial sale of approved therapeutic products, and we expect our revenue for the next several years will be derived primarily from payments under our current and any future grant awards and agreements with our collaboration partners.

Operating Expenses

Research and Development

To date, our research and development expenses have related primarily to research activities, including our discovery efforts, and preclinical and clinical development and the manufacturing of our therapeutic candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We do not track our internal research and development expenses on a program-by-program basis as they primarily relate to personnel, early research and consumable costs, which are deployed across multiple projects under development.

Research and development expenses consist primarily of:

•External expenses, consisting of:

◦expenses incurred in connection with the preclinical development of our programs;

◦clinical trials of our therapeutic candidates, including under agreements with third parties, such as consultants and CROs;

◦expenses associated with manufacturing our contract development and manufacturing therapeutic candidates including under agreements with CDMOs; and

◦other external expenses, such as laboratory services related to our discovery and development programs and other shared services, and

•Internal expenses, consisting of:

◦salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in research and development functions;

◦facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities; and

◦other internal expenses, such as laboratory supplies and other shared research and development costs.

We expect that research and development expense will continue to increase over the next several years as we continue development of our therapeutic candidates currently in clinical stage development, support our preclinical programs, and continue to discover new therapeutic candidates, as well as increase our headcount. In particular, clinical development of our therapeutic candidates, as opposed to preclinical development, generally has higher development costs, primarily due to the increased size and duration of later-stage clinical trials. Moreover, the costs associated with our CDMOs to manufacture our therapeutic candidates and future commercial products is also much more costly as compared to early stage preclinical development. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our therapeutic candidates due to the inherently unpredictable nature of preclinical and clinical development. Preclinical

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and clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which therapeutic candidates to pursue and how much funding to direct to each therapeutic candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each therapeutic candidate’s commercial potential. We will need substantial additional capital in the future to support these efforts. In addition, we cannot forecast which therapeutic candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our clinical development costs may vary significantly based on factors such as:

•per patient trial costs;

•the number of trials required for approval;

•the number of sites included in the trials;

•the countries in which the trials are conducted

•the length of time required to enroll eligible patients;

•the number of patients that participate in the trials;

•the number of doses that patients receive;

•the drop-out or discontinuation rates of patients;

•potential additional safety monitoring requested by regulatory agencies;

•the duration of patient participation in the trials and follow-up;

•the cost and timing of manufacturing of our therapeutic candidates;

•the phase and development of our therapeutic candidates;

•the efficacy and safety profile of our therapeutic candidates; and

•uncertainties related to the COVID-19 pandemic.

General and Administrative

G&A expenses consist primarily of:

•salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in G&A functions;

•expenses incurred in connection with accounting and audit services, legal services, commercial and business development and investor relations as well as consulting expense under agreements with third parties, such as consultants and contractors; and

•facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities, insurance and supplies.

We expect our G&A expenses will continue to increase over the next several years as we continue to increase our headcount and incur increased accounting, audit, legal, regulatory, and compliance costs as well as investor and public relations expenses associated with operating as a public company.

Other Income (Expense)

Other income (expense) consists primarily of interest expense on our debt from Oxford and, prior to conversion, interest expense related to the amortization of the debt discount related to the 2019 Note and the 2020 Notes. Other income (expense) also consists of gains or losses on the change in fair value of derivative liabilities and gains or losses on the change in fair value of warrant liabilities.

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Results of Operations

Comparison of Years Ended December 31, 2021 and 2020

The following table summarizes our consolidated results of operations for each of the periods indicated (in thousands, except percentages):

	YEAR ENDED DECEMBER 31,				CHANGE
	2021		2020		($)		(%)
Revenue:
License fee revenue	$	7,125	$	12,808	$	(5,683)	(44)	%
Grant revenue	106		80		26		33	%
Total revenue	7,231		12,888		(5,657)		(44)	%
Operating expenses:
Research and development	71,440		73,495		(2,055)		(3)	%
General and administrative	12,355		6,836		5,519		81	%
Total operating expenses	83,795		80,331		3,464		4	%
Loss from operations	(76,564)		(67,443)		(9,121)		14	%
Other income (expense):
Interest expense, net	(5,216)		(10,816)		5,600		(52)	%
Other income (expense), net	14		(2)		16		(800)	%
Change in fair value of warrant liabilities	—		(24)		24		(100)	%
Change in fair value of derivative liabilities	—		2,651		(2,651)		(100)	%
Total other expense	(5,202)		(8,191)		2,989		(36)	%
Provision for income taxes	2		3		(1)		(33)	%
Loss on equity method investment	—		487		(487)		(100)	%
Net loss	$	(81,768)	$	(76,124)	$	(5,644)	7	%

License Fee Revenue

License fee revenue decreased by $5.7 million to $7.1 million during the year ended December 31, 2021 from $12.8 million during the year ended December 31, 2020.

During the year ended December 31, 2021, we recognized $2.0 million upon the achievement of a milestone under our 2018 2seventy Agreement. Additionally, we recognized an additional $0.1 million and $2.1 million upon the extension of an option and the exercise of an option, respectively, under our 2020 2seventy Agreement. In addition, approximately $2.4 million of license fee revenue recognized was related to our agreements with Phylaxis, while approximately $0.5 million of license fee revenue recognized was related to our effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period under our option agreement with Chiesi.

During the year ended December 31, 2020, $7.4 million of license fee revenue earned was related to our option agreement with Chiesi. Additionally, we achieved a milestone under our agreement with Elpiscience and recognized $2.0 million of revenue related to this agreement. Additionally, we recognized $2.0 million of revenue under our agreements with Phylaxis, $0.4 million under our 2020 2seventy Agreement, and another $1.1 million related to other license revenue from non-affiliates.

Grant Revenue

Grant revenue remained consistent, with $0.1 million of revenue earned during each of the years ended December 31, 2021 and 2020. Grant revenue during the year ended December 31, 2021 consisted of revenue earned under our grant with the Department of Defense, or DoD, which was awarded in February 2021. Grant revenue during the year ended December 31, 2020 consisted of revenue earned under our prior grant with the DoD, which was awarded in September 2018 and concluded in September 2020.

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Research and Development Expense

The following table sets forth the primary external and internal research and development expenses (in thousands, except percentages):

	YEAR ENDED DECEMBER 31,				CHANGE
	2021		2020		($)		(%)
External expenses:
Clinical trials	$	20,282	$	9,015	$	11,267	125	%
Contract manufacturing	4,912		33,214		(28,302)		(85)	%
Preclinical studies	4,662		2,802		1,860		66	%
Other external research and development	3,267		3,145		122		4	%
Internal expenses:
Personnel	28,126		16,655		11,471		69	%
Equipment, depreciation, and facility	5,533		4,905		628		13	%
Other internal research and development	4,658		3,759		899		24	%
Total research and development expenses	$	71,440	$	73,495	$	(2,055)	(3)	%

Research and development expense decreased by $2.1 million to $71.4 million during the year ended December 31, 2021 from $73.5 million during the year ended December 31, 2020. The overall decrease in research and development expense was primarily due to the following factors:

•clinical trial expense increased by $11.3 million, which was primarily attributable to increased CRO costs from the progression of our Phase 1 trials and initiation of our Phase 2 trial;

•contract manufacturing expense decreased by $28.3 million, which was primarily attributable to the timing of work performed by our CDMO partners for the formulation and manufacturing of our INBRX-101 and INBRX-109 therapeutic candidates during the year ended December 31, 2020;

•preclinical expense increased by $1.9 million, which was primarily attributable to the initiation of additional preclinical studies;

•personnel-related expense increased by $11.5 million, which was primarily attributable to an overall increase in our headcount, certain salary adjustments, and the issuance of additional stock options;

•facilities expense increased by $0.6 million, which was primarily attributable to an increase in depreciable equipment and an increase in repairs and maintenance expenses; and

•other research and development expenses increased by $1.0 million which was primarily attributable to an increase in the purchase of lab supplies in relation to our increased preclinical lab activity.

G&A Expense

G&A expense increased by $5.6 million to $12.4 million during the year ended December 31, 2021 from $6.8 million during the year ended December 31, 2020. Personnel-related expenses increased by $3.7 million during the year ended December 31, 2021 as compared to the year ended December 31, 2020, due to increased headcount during the period, as well as certain salary adjustments, and additional stock-based compensation expense from the issuance of stock options. We also incurred an increase of $1.0 million during the year ended December 31, 2021 in legal fees related to patents as a result of the Company’s expanding intellectual property portfolio and an increase of $0.2 million of other legal fees during the year ended December 31, 2021. Additionally, the Company incurred an increase in other costs of approximately $0.5 million during the year ended December 31, 2021 associated with expenses of operating as a public company following our IPO in August 2020.

Other Income (Expense)

Interest expense, net. Interest expense, net, decreased by $5.6 million to $5.2 million for the year ended December 31, 2021 from $10.8 million for the year ended December 31, 2020.

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During the year ended December 31, 2021, we incurred $5.4 million of interest related to interest paid and the amortization of debt discounts related to the Amended 2020 Loan Agreement with Oxford. Interest expense was offset in part by $0.2 million of interest income.

During the year ended December 31, 2020, $7.8 million of the total interest expense was related to accrual of interest and amortization of debt discounts on the 2019 Note and the 2020 Notes through their conversion date, in addition to $2.2 million of debt discounts on the 2019 Note and the 2020 Notes accelerated upon the conversion in August 2020. During the year ended December 31, 2020, $0.9 million of the total interest expense was related to the Amended 2020 Loan Agreement with Oxford.

Change in fair value of warrant liabilities. During the year ended December 31, 2021, we recorded no gain or loss related to the change in fair value of warrant liabilities since they no longer existed and were reclassified into equity prior to the beginning of the period. During the year ended December 31, 2020, we recognized a loss on fair value of warrant liabilities of approximately $24,000 upon the remeasurement and reclassification of the warrants into equity following our IPO.

Change in fair value of derivative liabilities. During the year ended December 31, 2021, we recorded no gain or loss related to the change in fair value of derivative liabilities since they were already extinguished at the beginning of the period. During the year ended December 31, 2020, we recognized a gain of approximately $2.7 million related to the change in fair value of derivative liabilities upon the revaluation of the derivative to zero during the period.

Income Taxes

Income tax expense remained consistent with approximately $2,000 and $3,000 during the years ended December 31, 2021 and 2020. For the years ended December 31, 2021 and 2020, we have applied a 100% valuation allowance against our federal deferred tax assets since it is more likely than not that the deferred tax assets will not be realized.

Loss on Equity Method Investment

During the year ended December 31, 2021, we recorded no loss on our equity method investment since it was already written down to zero prior to the beginning of the period.

During the third quarter of 2020, we entered into a joint venture with an entity affiliated with ArrowMark Partners, Phylaxis, and received a 10% equity interest in the company. Upon receipt of the equity interest, we established an equity method investment at fair value. The loss on equity method investment during the year ended December 31, 2020 of $0.5 million consists of our share of losses from our investment in Phylaxis, which reduced our equity investment to zero.

Cash Flow Summary

The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Net cash used in operating activities	$	(80,323)	$	(47,968)
Net cash used in investing activities	(809)		(1,364)
Net cash provided by financing activities	83,769		166,456
Net increase in cash	$	2,637	$	117,124

Operating Activities

Net cash used in operating activities was $80.3 million during the year ended December 31, 2021 and consisted primarily of a net loss of $81.8 million, adjusted for non-cash items including stock-based compensation expense of $15.0 million, accretion on our debt discount and the non-cash portion of interest expense related to our debt of $1.2 million, depreciation and amortization of $1.2 million, and non-cash lease expense of $1.5 million. Changes in

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operating assets and liabilities also contributed to the cash used in operating activities, primarily related to increases in prepaid expenses of $4.0 million and other non-current assets of $1.6 million, as well as decreases in accounts payable of $4.6 million and in accrued expenses of $3.7 million, which are due to the timing of clinical and development activities which were paid during the year. Additionally, the operating lease liability decreased by $1.5 million as a result of lease payments made throughout the year. In addition, deferred revenue decreased by $1.7 million following the recognition of $0.5 million of previously deferred revenue related to our option agreement with Chiesi and $2.4 million of previously deferred revenue related to our agreements with Phylaxis, offset in part by the receipt of $1.25 million of additional deferred revenue under our Phylaxis agreements.

Net cash used in operating activities was $48.0 million during the year ended December 31, 2020 and consisted primarily of a net loss of $76.1 million, adjusted for non-cash items such as accretion on our debt discount and the non-cash portion of interest expense related to our debt of $10.2 million, stock-based compensation expense of $5.0 million, depreciation and amortization of $1.0 million, non-cash lease expense of $1.4 million, change in fair value of derivative liabilities of $2.7 million, and a loss on equity method investments of $0.5 million. Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to increases in accounts payable of $10.4 million and to accrued expenses and other current liabilities of $8.5 million due to an overall higher volume of clinical and development activities, and a decrease in prepaid expenses of $0.7 million. These were offset in part by a decrease in operating lease liability of $1.3 million and a decrease in deferred revenue of $5.6 million as a result of the recognition of $7.4 million of previously deferred revenue related to our option agreement with Chiesi and the addition of $2.3 million of deferred revenue related to our agreements with Phylaxis, adjusted for $0.5 million of non-cash deferred revenue related to the equity interest in Phylaxis.

Investing Activities

Net cash used in investing activities was $0.8 million and $1.4 million during the years ended December 31, 2021 and 2020, respectively, and was related to capital purchases, including laboratory equipment and leasehold improvements for our facility in La Jolla, California.

Financing Activities

Net cash provided by financing activities was $83.8 million during the year ended December 31, 2021 and consisted primarily of net proceeds of $40.0 million from the Amended 2020 Loan Agreement and proceeds from our ATM offering of $40.2 million, offset in part by the payment of costs associated with the ATM offering of $0.4 million. In addition, we received proceeds of $4.0 million from the exercise of stock options.

Net cash provided by financing activities was $166.5 million for the year ended December 31, 2020 and consisted primarily of the gross proceeds of $136.9 million from our IPO, offset in part by $11.0 million of costs associated with the offering, gross proceeds of $15.0 million from the sale and issuance of the 2020 Notes, and net proceeds of $29.9 million from the Amended 2020 Loan Agreement, consisting of $30.0 million in principal, net of $0.1 million in lender fees, further offset in part by $0.8 million of costs associated with the debt issuance. These proceeds were offset in part by the repayment of $3.6 million of principal and final payments on our previous loan and security agreement, as amended, or the 2015 Loan Agreement. During 2020, we also received $1.9 million in borrowings from the Paycheck Protection Program, or PPP Loan, which was subsequently repaid in full with principal payments of $1.9 million.

Critical Accounting Estimates and Policies

Our consolidated financial statements and accompanying notes are prepared in accordance with United States generally accepted accounting principles, or GAAP, which requires management to make estimates and assumptions that affect the amounts reported. Management bases its estimates on historical experience, market and other conditions, and various other assumptions it believes to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, the estimation process is, by its nature, uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our consolidated financial statements may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material effect in our consolidated financial statements. We review our estimates, judgments, and assumptions used in our accounting practices periodically and reflect the effects of

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revisions in the period in which they are deemed to be necessary. We believe that these estimates are reasonable; however, our actual results may differ from these estimates.

While our significant accounting policies are described in more detail in Note 1 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following critical accounting policies and estimates have a higher degree of inherent uncertainty and require our most significant judgments:

Revenue Recognition

We generate revenue from our collaboration and licensing agreements with partners, as well as from grants. Billings to customers or payments received from customers are included in deferred revenue on the balance sheet until all revenue recognition criteria are met.

We recognize revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. To determine revenue recognition for arrangements we conclude are within the scope of Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, we assess the goods or services promised within each contract, assess whether each promised good or service is distinct and identifies those that are performance obligations. We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaboration and License Agreements

We enter into collaborative agreements with partners that typically include one or more of the following: (i) license fees; (ii) nonrefundable up-front fees; (iii) payments for reimbursement of research costs; (iv) payments associated with achieving specific development, regulatory, or commercial milestones; and (v) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, we analyze each unit of account within the contract to determine if the counterparty is a customer in the context of the unit of account, in which case we apply the recognition, measurement, presentation, and disclosure requirements of ASC Topic 606. If a unit of account does not represent a transaction with a customer, it represents an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements, or ASC Topic 808.

In applying the principles of ASC Topic 606, we consider a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. We evaluate each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees and non-refundable upfront fees are considered fixed, while milestone payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

As of December 31, 2021, all collaboration and license revenue was within the scope of ASC Topic 808 and/or ASC Topic 606 and recognized accordingly.

See Note 7 to our consolidated financial statements included elsewhere in this Annual Report for additional information on our collaboration and license agreements.

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on our behalf, pursuant to development and consulting agreements in place. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expense. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials and other events. If applicable, costs incurred related to the purchase of in-process research and development for early-stage

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products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Fair Value of Stock-Based Awards and Stock-Based Compensation Expense

We recognize compensation costs related to stock-based awards, including stock options, under our 2017 Employee, Director and Consultant Equity Incentive Plan to certain of our employees and certain members of our board of directors. The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards.

We estimate the grant date fair value, and the resulting stock-based compensation, using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the use of subjective assumptions to determine the fair value of stock-based awards. These assumptions include:

•Fair Value of Common Stock—Our board of directors determines the fair value of each share of underlying common stock based on the closing price of our common stock as reported by the applicable trading market on the date of the grant. Our board of directors intended all options granted to be exercisable at a price per share not less than the per share fair value of our common stock underlying those options on the grant date.

•Expected Term—We estimate the expected term of our stock options granted to employees and non-employee directors using the simplified method, whereby, the expected term equals the average of the vesting term and the original contractual term of the option. We utilize this method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

•Expected Volatility—Due to the lack of company specific historical and implied volatility data, we based our estimate of expected volatility on the estimate and expected volatilities of a guideline group of publicly traded companies. For these analyses, we select companies with comparable characteristics to ours including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the stock-based awards. We compute the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of our stock-based awards. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available.

•Risk-Free Interest Rate—For the determination of the risk-free interest rates we utilize the U.S. Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption.

•Expected Dividend—The expected dividend yield is assumed to be zero as we have never paid dividends and do not have current plans to pay any dividends on our common stock.

Changes in these assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. See Note 6 to our consolidated financial statements included elsewhere in this Annual Report for information regarding certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the periods discussed.

Recent Accounting Pronouncements

For information with respect to recently issued accounting standards and the impact of these standards, if any, on our consolidated financial statements, refer to Note 1 in our consolidated financial statements in Part II, Item 8 of this Annual Report.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

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Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	PAGE
Report of Independent Registered Public Accounting Firm (BDO USA, LLP; San Diego, California; PCAOB ID No. 243)	114
Consolidated Balance Sheets as of December 31, 2021 and 2020	116
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020	117
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the Years Ended December 31, 2021 and 2020	118
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020	119
Notes to the Consolidated Financial Statements	121

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Inhibrx, Inc.

La Jolla, California

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Inhibrx, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Clinical Trial Accruals

As described in Note 1 to the consolidated financial statements, the Company recognizes costs incurred for preclinical studies, clinical trials and manufacturing activities as research and development expenses based on its evaluation of its vendors’ progress toward completion of specific tasks. When payment terms under the related contracts do not align with the pattern of costs incurred, the Company is required to estimate the outstanding

114

obligations as of period end. When evaluating the adequacy of the accrued clinical trial liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs, which can involve significant judgments, estimates and specialized knowledge. As of December 31, 2021, the Company recorded $4.5 million in clinical trial accruals.

We identified clinical trial accruals as a critical audit matter due to the application of significant management judgment over the estimate of services provided as of year-end. Specifically, evaluating the progress or stage of completion of the clinical trial activities under the Company’s research and development agreements is sensitive to the availability of information from third-party service providers and internal clinical personnel. Additionally, due to the duration of clinical-related development activities, the estimate of the clinical trial progress and the level of effort expended requires judgment based on the nature, amounts, status, and estimated progress of each key activity. Auditing these elements involved especially subjective auditor judgment due to the nature of the audit evidence available to address these matters.

The primary procedures we performed to address this critical audit matter included:

•Reviewing the Company’s contractual agreements with third parties and any change orders to assess the impact to the amounts recorded including changes in scope and timing.

•Testing clinical accrual cutoff and evaluating the completeness of clinical accruals by comparing invoices received by the Company subsequent to December 31, 2021 to the amounts recognized by the Company as of that date and evaluating the Company’s documentation of trial progress and status, including consideration of measures such as patient enrollment and milestones achieved.

•Testing clinical accrual for completeness and accuracy by confirming amounts due at December 31, 2021 directly with clinical research organizations (“CROs”) including total expenses incurred for all services provided by the CRO during 2021, and by evaluating publicly available information (such as press releases, investor presentations and public databases that track clinical trials) and board of directors’ materials regarding the status of clinical trials and inquiring of clinical staff outside of finance to gain an understanding of the status of significant on-going clinical trials.

/s/ BDO USA, LLP

We have served as the Company’s auditor since 2018.

San Diego, California

February 28, 2022

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Inhibrx, Inc.

Consolidated Balance Sheets

(In thousands, except share data and par value) 

	AS OF DECEMBER 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	131,301	$	128,664
Accounts receivable	373		82
Receivables from related parties	505		533
Prepaid expenses and other current assets	6,933		2,893
Total current assets	139,112		132,172
Property and equipment, net	3,153		3,492
Right-of-use asset	6,338		7,831
Other non-current assets	1,847		245
Total assets	$	150,450	$	143,740
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,125	$	13,458
Accrued expenses	9,621		13,357
Current portion of deferred revenue	2,034		3,081
Current portion of lease liability	1,674		1,503
Total current liabilities	22,454		31,399
Long-term debt, net of current portion and including final payment fee	70,470		29,244
Non-current portion of lease liability	5,033		6,707
Non-current portion of deferred revenue	110		737
Other non-current liabilities	—		180
Total liabilities	98,067		68,267
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.0001 par value, 15,000,000 shares authorized and no shares outstanding as of December 31, 2021 and 2020	—		—
Common stock, $0.0001 par value, 120,000,000 shares authorized as of December 31, 2021 and 2020; 38,991,307 and 37,712,390 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively	4		4
Additional paid-in-capital	279,526		220,848
Accumulated deficit	(227,147)		(145,379)
Total stockholders’ equity	52,383		75,473
Total liabilities, convertible preferred stock and stockholders’ equity	$	150,450	$	143,740

The accompanying notes are an integral part of these consolidated financial statements.

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Inhibrx, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

	YEAR ENDED DECEMBER 31,
	2021		2020
Revenue:
License fee revenue	$	7,125	$	12,808
Grant revenue	106		80
Total revenue	7,231		12,888
Operating expenses:
Research and development	71,440		73,495
General and administrative	12,355		6,836
Total operating expenses	83,795		80,331
Loss from operations	(76,564)		(67,443)
Other income (expense):
Interest expense, net	(5,216)		(10,816)
Other income (expense), net	14		(2)
Change in fair value of warrant liabilities	—		(24)
Change in fair value of derivative liabilities	—		2,651
Total other expense	(5,202)		(8,191)
Loss before provision for income taxes	(81,766)		(75,634)
Provision for income taxes	2		3
Loss on equity method investment	—		487
Net loss	$	(81,768)	$	(76,124)
Net loss per share, basic and diluted	$	(2.15)	$	(3.01)
Weighted-average shares of common stock outstanding, basic and diluted	38,010		25,261

The accompanying notes are an integral part of these consolidated financial statements.

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Inhibrx, Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands)

	Convertible Preferred Stock (Shares)	Convertible Preferred Stock (Amount)		Common Stock (Shares)	Common Stock (Amount)		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
Balance as of December 31, 2019	12,534	$	59,507	18,154	$	2	$	(24,316)	$	(69,255)	$	(93,569)
Stock-based compensation expense	—	—		—	—		5,023		—		5,023
2020 Notes - beneficial conversion feature	—	—		—	—		2,656		—		2,656
Issuance of shares upon exercise of stock options	—	—		2	—		27		—		27
Issuance of shares in IPO, net of issuance costs	—	—		8,050	1		125,859		—		125,860
Issuance of shares in conversion of preferred shares	(12,534)	(59,507)		7,211	1		59,506		—		59,507
Issuance of shares in conversion of the 2019 Note and the 2020 Notes	—	—		4,295	—		59,393		—		59,393
Reversal of unamortized BCF on the 2019 Note	—	—		—	—		(5,332)		—		(5,332)
Reversal of unamortized BCF on the 2020 Notes	—	—		—	—		(2,107)		—		(2,107)
Reclassification of warrant liabilities into equity	—	—		—	—		139		—		139
Net loss	—	—		—	—		—		(76,124)		(76,124)
Balance as of December 31, 2020	—	$	—	37,712	$	4	$	220,848	$	(145,379)	$	75,473
Stock-based compensation expense	—	—		—	—		15,048		—		15,048
Issuance of shares upon exercise of stock options	—	—		358	—		3,956		—		3,956
Issuance of shares, net of issuance costs	—	—		921	—		39,674		—		39,674
Net loss	—	—		—	—		—		(81,768)		(81,768)
Balance as of December 31, 2021	—	$	—	38,991	$	4	$	279,526	$	(227,147)	$	52,383

The accompanying notes are an integral part of these consolidated financial statements.

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Inhibrx, Inc.

Consolidated Statements of Cash Flows

(In thousands)

	YEAR ENDED DECEMBER 31,
	2021		2020
Cash flows from operating activities
Net loss	$	(81,768)	$	(76,124)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,195		1,019
Accretion of debt discount and non-cash interest expense	1,234		10,189
Stock-based compensation expense	15,048		5,023
Non-cash lease expense	1,493		1,374
Gain on disposal of fixed assets	(9)		—
Change in fair value of derivative liabilities	—		(2,651)
Change in fair value of warrant liabilities	—		24
Loss from equity method investment	—		487
Changes in operating assets and liabilities:
Accounts receivable	(167)		117
Receivables from related parties	28		(294)
Prepaid expenses and other current assets	(4,040)		690
Other non-current assets	(1,602)		—
Accounts payable	(4,642)		10,426
Accrued expenses and other current liabilities	(3,736)		8,525
Operating lease liability	(1,503)		(1,345)
Deferred revenue, current portion	(1,047)		(5,345)
Deferred revenue, non-current portion	(627)		(263)
Other non-current liabilities	(180)		180
Net cash used in operating activities	(80,323)		(47,968)
Cash flows from investing activities
Purchase of fixed assets	(864)		(1,364)
Proceeds from the sale of fixed assets	55		—
Net cash used in investing activities	(809)		(1,364)
Cash flows from financing activities
Proceeds from ATM offering	40,203		—
Costs associated with ATM offering	(382)		—
Proceeds from the issuance of debt	39,992		29,938
Payment of fees associated with debt	—		(786)
Proceeds from exercise of stock options	3,956		27
Proceeds from initial public offering, gross	—		136,850
Costs associated with initial public offering	—		(10,990)
Proceeds from the issuance of convertible notes	—		15,000
Repayment of principal on debt	—		(2,183)
Final payment on debt	—		(1,400)

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Proceeds from the Paycheck Protection Program loan	—		1,875
Repayment of principal on the Paycheck Protection Program loan	—		(1,875)
Net cash provided by financing activities	83,769		166,456
Net increase in cash	2,637		117,124
Cash and cash equivalents at beginning of period	128,664		11,540
Cash and cash equivalents at end of period	$	131,301	$	128,664
Supplemental disclosure of cash flow information
Cash paid for interest	$	3,889	$	504
Cash paid for income taxes	$	2	$	3
Supplemental schedule of non-cash investing and financing activities
ATM offering costs included in accounts payable	$	271	$	—
ATM offering costs reimbursable in accounts receivable	$	124	$	—
Payable for purchase of fixed assets	$	38	$	83
Conversion of preferred stock to common stock	$	—	$	59,507
Conversion of the 2019 Note and the 2020 Notes to common stock	$	—	$	59,393
Debt discount arising from convertible note beneficial conversion features and reversal of beneficial conversion features	$	—	$	4,783
Operating lease liabilities arising from obtaining right-of-use assets	$	—	$	1,752
Derivative liabilities arising from the issuance of the 2019 Note and the 2020 Notes	$	—	$	735
Non-cash equity method investment	$	—	$	487
Reclassification of warrant liabilities to equity	$	—	$	139
Warrant liabilities issued to lender in conjunction with 2020 Loan Agreement	$	—	$	115

The accompanying notes are an integral part of these consolidated financial statements.

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Inhibrx, Inc.

Notes to Consolidated Financial Statements

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Inhibrx, Inc., or the Company, or Inhibrx, is a clinical-stage biotechnology company focused on developing a broad pipeline of novel biologic therapeutic candidates. The Company combines target biology with protein engineering, technologies, and research and development to design therapeutic candidates. The Company’s current pipeline is focused on oncology and orphan diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, risks associated with preclinical studies, clinical trials and regulatory applications, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. The Company’s therapeutic candidates currently under development will require significant additional research and development efforts, including clinical and preclinical testing and marketing approval prior to commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Initial Public Offering

On August 21, 2020, the Company completed its initial public offering, or IPO, in which it sold 8,050,000 shares of common stock at an offering price of $17.00 per share. Net proceeds from the IPO were $125.9 million, net of underwriting discounts, commissions, and offering costs.

In addition, each of the following occurred in connection with the completion of the IPO:

•the conversion of the 2019 Note and the 2020 Notes (each as defined below) into 4,294,603 shares of the Company’s common stock;

•the conversion of all outstanding convertible preferred stock into 7,211,086 shares of the Company’s common stock;

•the adjustment of an outstanding warrant to purchase convertible preferred stock into a warrant to purchase 7,354 shares of the Company’s common stock; and

•the amendment and restatement of the Company’s certificate of incorporation, authorizing 120.0 million shares of common stock and 15.0 million shares of preferred stock.

Reverse Stock Split

On August 11, 2020 the Company effected a one-for-1.7382 reverse stock split of the Company’s common stock, or the Reverse Stock Split. The par value and the authorized shares of the common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock and the conversion prices of the convertible preferred stock and convertible notes have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an annual report on the Form 10-K.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation.

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Liquidity

As of December 31, 2021, the Company had an accumulated deficit of $227.1 million and cash and cash equivalents of $131.3 million. From its inception and through December 31, 2021, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements.

As discussed in Note 5, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. As of December 31, 2021, 921,042 shares have been sold pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Impact of COVID-19 Pandemic

In response to the global outbreak of COVID-19 and the World Health Organization’s classification of the outbreak as a pandemic, the Company continues to take the necessary precautions to ensure the safety of its employees and to minimize interruptions to its operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of these financial statements. While the pandemic has not yet had a material effect on the Company’s financial results, it is uncertain as to the full magnitude of impact the pandemic will have on the Company’s financial condition, liquidity and future results of operations. Management is actively monitoring the risks to public health and the impact of overall global business activity on its financial condition, liquidity, operations, suppliers, industry, and workforce.

The U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. 

The CARES Act includes a provision for a Paycheck Protection Program, or PPP, administered by the U.S. Small Business Administration, or SBA, and further amended by the Paycheck Protection Program Flexibility Act of 2020,

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or PPP Flexibility Act, which was enacted on June 5, 2020. The Company was approved for a loan pursuant to the PPP, or the PPP Loan, in the amount of $1.9 million and received the funds on May 11, 2020. On October 2, 2020, the Company repaid the loan in full plus all interest accrued during the period outstanding.

The CARES Act also permits employers to defer the payment of the employer share of social security taxes due for the period beginning March 27, 2020 and ending December 31, 2020. Of the amounts deferred, 50% was required to be paid by December 31, 2021 and the remaining 50% is required to be paid by December 31, 2022. The Company began deferring payment of the employer share of social security taxes in April 2020 and deferred a total of $0.4 million of such taxes during the period. The Company paid $0.3 million of deferred taxes during December 2021. As of December 31, 2021, the Company has a remaining deferred payment of $0.1 million of such taxes which are classified as accrued expenses in the Company’s consolidated balance sheets.

The Company will continue to examine and evaluate any impacts the CARES Act and associated subsequent legislation may have on its business and taxes.    

Use of Estimates

The preparation of these consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to evaluation of embedded derivative instruments and beneficial conversion features, or BCFs, within its previously issued and outstanding convertible notes, whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of accounts receivable, accounts payable, accrued expense, its long-term debt, convertible notes, warrants, and derivative instruments as applicable. The carrying amounts of financial instruments such as accounts receivable, accounts payable, accrued expense, and convertible notes approximate their related fair values due to the short-term nature of these instruments. The carrying value of the Company’s debt approximates fair value due to its interest being reflective of current market rates for debt with similar terms and conditions. The Company’s derivative instruments and warrants are carried at fair value based on unobservable market inputs.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash held in financial institutions including readily available checking and money market accounts.

Concentrations of Credit Risk

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

The Company continually evaluates its accounts receivable for all outstanding third-party balances to determine the potential exposure to a concentration of credit risk. The Company’s major third-party contracting parties, some of which account for significant balances in both accounts receivable and revenue, are generally large, credit-worthy biotechnology companies and government bodies. The Company assesses the collectability of accounts receivable through a review of its current aging, as well as an analysis of its historical collection rate, general economic conditions, and credit status of these third parties. As of December 31, 2021 and 2020, all outstanding accounts receivable were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

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The Company currently depends on third-party suppliers for key materials and services used in its research and development, as well as manufacturing processes, and is subject to certain risks related to the loss of these third-party suppliers or their inability to supply the Company with adequate materials and services. In August 2018, the Company entered into a strategic alliance with WuXi Biologics (Hong Kong), Limited, or WuXi Biologics, pursuant to which the Company agreed, for three years and subject to certain conditions, to exclusively use WuXi Biologics to manufacture its therapeutic candidates on a project-by-project basis. In August 2021, the exclusivity provisions of the Wuxi Agreement expired, and the Company may use manufacturers other than Wuxi to manufacture its therapeutic candidates. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts, including WuXi Biologics, and is dependent on these third parties for the production of its therapeutic candidates in accordance with relevant regulations such as current Good Manufacturing Practices, or cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

Dividends

As of December 31, 2021, the Company has never declared or paid any dividends on its common stock.

Additionally, the Amended 2020 Loan Agreement limits, among other things, the Company’s ability to pay dividends and make certain other payments. Any future determination to pay dividends on the Company’s common stock will be at the discretion of the Company’s board of directors and will depend upon, among other factors, the results of operations, financial condition, capital requirements, contract restrictions, business prospects and other factors the Company’s board of directors may deem relevant.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. The Company estimates useful lives as follows:

•machinery and equipment: three to five years;

•furniture and fixtures: three to five years; and

•computer software: four to five years.

Amortization of leasehold improvements is provided on a straight-line basis over the shorter of their estimated useful lives or the lease term. The costs of additions and betterments are capitalized, and repairs and maintenance costs are expensed in the periods incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. If such assets are considered impaired, the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, fair value being determined based upon future cash flows or appraised values, depending on the nature of the asset. The Company recognized no impairment losses during any of the periods presented within its consolidated financial statements.

Leases

The Company has two existing leases for its corporate headquarters in La Jolla, California. Its first lease commenced in June 2018. In May 2019, the Company signed an amendment to its lease agreement to expand the Company’s facilities, which commenced in January 2020 and is accounted for as a separate lease. The Company’s two existing leases are classified as operating leases.

For the long-term operating lease of its corporate headquarters, the Company recognized a right-of-use asset and lease liability on its consolidated balance sheet. The lease liability is determined as the present value of future lease payments using an estimated incremental borrowing rate that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise. Agreements are reviewed at

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inception to determine if they contain a lease. Leases are reviewed and classified as operating or financing leases at commencement.

The Company has elected to exclude from its consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases) and has elected not to separate lease components and non-lease components for its long-term operating leases.

Rent expense for the operating leases are recognized on a straight-line basis over the lease term and is included in operating expense in the consolidated statements of operations for all periods presented.

Equity Method Investment

The Company uses the equity method of accounting for equity investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. As discussed in Note 7, the Company received an equity investment in the form of a 10% equity interest as consideration in a series of agreements with Phylaxis (as defined below), which is accounted for as an equity method investment. The Company's proportionate share of the net income or loss of these companies is included as loss in equity method investment in the consolidated statement of operations. Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, legal form of the investee (e.g. limited liability corporation), participation in policy-making decisions, and material purchase and sale transactions. During the third quarter of 2020, the Company’s equity method investment was written down to zero as a result of the allocation of the Company’s share of losses of the investee. As of December 31, 2021 and 2020, the equity method investment remains at zero.

Derivative Liabilities

As discussed in Note 4, the convertible promissory note, or the 2019 Note, issued in May 2019 to DRAGSA 50 LLC, an entity affiliated with Viking Global Investors LP, or Viking, and the convertible promissory notes, or the 2020 Notes, issued in April 2020 to Viking and certain other investors contained embedded features that provided multiple settlement alternatives. Certain of these settlement features provided the noteholders with a right to a fixed number of the Company’s shares upon conversion of the note. Other settlement features provided the noteholders the right or the obligation to receive cash or a variable number of shares upon the completion of a capital raising transaction, change of control, qualified IPO (as defined in the 2019 Note and the 2020 Notes), or default of the Company. The Company evaluated each settlement alternative within the 2019 Note and the 2020 Notes under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 815-15, Embedded Derivatives and ASC Topic 815-40, Contracts in Entity’s Own Equity and determined certain of the settlement features would be accounted for as redemption features meeting the requirements for separate accounting as a single, compound derivative instrument.

This single, compound derivative instrument was accounted for as a liability at its estimated fair value as of the date of issuance, and then subsequently remeasured to fair value as of each balance sheet date, with the related remeasurement adjustment being recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. During August 2020, the Company consummated its IPO, resulting in the conversion of the 2019 Note and the 2020 Notes into shares of the Company’s common stock. As of December 31, 2021 and 2020, the derivative liabilities no longer exist.

Warrant Liabilities

As discussed in Note 3, in conjunction with the 2020 Loan Agreement with Oxford, the Company issued warrants for the purchase of: 1) its preferred stock if the Company remained privately-held or 2) common stock upon the successful completion of an IPO prior to December 31, 2020. Upon the issuance of the warrants in July 2020, pursuant to ASC Topic 480, the warrants were accounted for as liabilities and measured at their estimated fair value as of the date of issuance, based on the potential conversion into preferred stock. During August 2020, upon consummation of the Company’s IPO, the warrants were deemed to be issued for the purchase of common stock and

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were no longer accounted for as liabilities. The change in fair value was recognized as a component of change in fair value of warrant liabilities in the consolidated statements of operations during the year ended December 31, 2020.

Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The 2019 Note and the 2020 Notes contained embedded derivative liabilities (see Note 4). The 2020 Loan Agreement contained warrant liabilities (see Note 3). Prior to the completion of the IPO in August 2020, these were classified within Level 3 of the hierarchy, since they were valued by using inputs that were unobservable in the market. Upon the consummation of the IPO in August 2020, the derivative liabilities and warrant liabilities no longer existed. As of December 31, 2021 and 2020, the Company had no financial liabilities measured at fair value.

Prior to the completion of the IPO in August 2020, the Company’s liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) included the derivative liabilities related to the 2019 Note and the 2020 Notes and the warrants issued with the 2020 Loan Agreement. The following table provides a reconciliation of financial instruments measured at fair value using Level 3 unobservable inputs for the year ended December 31, 2020 (in thousands):

Balance as of December 31, 2019	$	1,916
Establishment of derivative liability on the 2020 Notes	735
Establishment of warrant liabilities on the 2020 Loan Agreement	115
Change in fair value of derivative liabilities on the 2019 and 2020 Notes	(2,651)
Change in fair value of warrant liabilities	24
Reclassification of warrant liabilities into equity	(139)
Balance as of December 31, 2020	$	—

The fair value of the Company’s derivative liabilities categorized in Level 3 of the fair value hierarchy during the year ended December 31, 2020 was determined, with the assistance of an independent third-party valuation specialist, using a lattice model. The valuation utilized unobservable inputs, including the discount rate, management’s assessment of the probability of various underlying events triggering the conversion of the Company’s 2019 Note and the 2020 Notes (as discussed in Note 4), such as an IPO, financing, or extraordinary event, and the current valuation of the Company determined with the assistance of an independent third-party valuation specialist. The warrant liabilities were valued using a Black-Scholes model upon issuance. As of December 31, 2020, the derivative liabilities no longer exist as a result of the conversion of the 2019 Note and the 2020 Notes upon the IPO. Additionally, as of December 31, 2020 the warrant liabilities have been reclassified into equity after the Oxford warrants became exercisable for common stock subsequent to the Company’s IPO.

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There were no financial instruments measured at fair value during the year ended December 31, 2021.

Deferred Financing Costs and Other Debt-Related Costs

Deferred financing costs are capitalized, recorded as an offset to the Company’s debt balances and amortized as interest expense over the term of the associated debt instrument using the effective interest method, pursuant to ASC Topic 835-30, Imputation of Interest. If the maturity of the debt is accelerated as a result of default or early debt repayment, the amortization would then be accelerated. Amounts paid related to debt financing activities are presented on the consolidated balance sheet as a direct deduction from the debt liability.

Deferred Offering Costs

The Company capitalizes costs that are directly associated with equity financings until such financings are consummated at which time such costs are recorded against the gross proceeds of the offering.

Legal, accounting, and filing fees related directly to the Company’s IPO were capitalized as deferred offering costs to be offset against proceeds upon the consummation of the IPO within stockholders’ equity (deficit). In August 2020, the Company completed its IPO and offset $11.0 million of IPO costs against the proceeds. No deferred offering costs were capitalized on the Company’s consolidated balance sheets as of December 31, 2020.

Legal, accounting, and filing fees related directly to the Company’s Shelf Registration are capitalized as deferred offering costs. Deferred offering costs associated with the Shelf Registration are reclassified to additional paid-in capital when the Company completes offerings under the Shelf Registration. In November 2021, the Company completed an offering under the Shelf Registration and offset $1.7 million of offering costs against the proceeds.

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the consolidated balance sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements, or ASC Topic 808. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone

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payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future are not material rights as they are contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Grant Revenue

The Company has been awarded grants from the Congressionally Directed Medical Research Program, or CDMRP, funded through the DoD. With respect to revenue derived from reimbursement of direct, out-of-pocket expenses for research and development costs associated with these grants, where the Company acts as a principal with discretion to choose suppliers, bears credit risk, and performs part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations.

Since there is no transfer of control of goods or services to the granting entities, the granting entities do not meet the definition of a “customer” as defined by ASC Topic 606 and therefore, these government grants and private not-for-profit institution grants are not within the scope of ASC Topic 606.

Revenue from these grants are based upon internal costs incurred that are specifically covered by the grant, plus an additional rate that provides funding for overhead expenses. Revenue is recognized as the Company incurs expenses related to the grant which is consistent with the concept of transfer of control of a service over time under ASC Topic 606.

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the

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differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.

The utilization of unused federal and state net operating losses, or NOLs, and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code, as amended, or IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two class method required for participating securities as the convertible preferred stock is considered a participating security. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Accordingly, for the years ended December 31, 2021 and 2020, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF DECEMBER 31,
	2021	2020
Outstanding stock options	4,064	2,525
Warrant to purchase common stock	7	7
	4,071	2,532

Fair Value of Stock-Based Awards

The Company recognizes compensation costs related to stock options based on the estimated fair value of the awards on the date of grant. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model. The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes forfeitures as they occur.

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Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

Segment Information

The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise stated, the Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which addresses the accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; and (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. The provisions of this guidance are to be applied prospectively upon their effective date. ASU 2020-01 was effective for fiscal years beginning after December 15, 2020, and interim periods within those years. Early adoption was permitted, but required simultaneous adoption of all provisions of this guidance. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves consistent application and simplification of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 was effective for fiscal years beginning after December 15, 2020. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options, or Subtopic 470-20 and Derivatives and Hedging—Contracts in Entity’s Own Equity, or Subtopic 815-40: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Specifically, ASU 2020-06 simplifies accounting for the issuance of convertible instruments by removing major separation models required under current GAAP. In addition, the ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share, or EPS, calculation in certain areas. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, beginning in fiscal years which begin after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 under a modified retrospective approach as of January 1, 2021. As a result of the adoption, there was no impact on retained earnings or other components of equity or to earnings per share in the Company’s consolidated financial statements.

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Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 362), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods therein, and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2021-04 may have on its consolidated financial statements and related disclosures.

2. OTHER FINANCIAL INFORMATION

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Outside research and development services	$	6,343	$	2,204
Other	590		689
Prepaid expense and other current assets	$	6,933	$	2,893

Property and Equipment, Net

Property and equipment, net were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Machinery and equipment	$	6,286	$	5,652
Leasehold improvements	441		441
Furniture and fixtures	514		507
Computer software	42		—
Construction in process	281		257
Total property and equipment	7,564		6,857
Less: accumulated depreciation and amortization	(4,411)		(3,365)
Property and equipment, net	$	3,153	$	3,492

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Depreciation and amortization expense totaled $1.2 million and $1.0 million for the years ended December 31, 2021 and 2020, respectively, and consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	1,003	$	836
General and administrative	192		183
Total depreciation and amortization expense	$	1,195	$	1,019

Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Clinical research and development	$	4,496	$	970
Other outside research and development	2,893		10,559
Compensation expense	1,322		1,165
Professional fees	261		282
Other	649		381
Accrued expenses	$	9,621	$	13,357

The amount accrued for research and development expense relates primarily to the Company’s usage of third-party CROs and CDMOs for clinical and development efforts as its therapeutic candidates progress. See Note 1 for further discussion of the components of research and development.

3. DEBT

2020 Loan Agreement

On July 15, 2020, the Company entered into a loan and security agreement, or the 2020 Loan Agreement, with Oxford Finance LLC, or Oxford, pursuant to which it received $10.0 million in gross proceeds, net of $0.1 million of debt issuance costs.

On November 12, 2020, the Company entered into an amendment to the 2020 Loan Agreement, or the November 2020 Amendment, and received $20.0 million in additional gross proceeds, net of $0.02 million of debt issuance costs and $0.7 million of a one-time first amendment fee. The November 2020 Amendment provided for two additional tranches of term loans, in addition to the first $10.0 million tranche, or Term A, for an aggregate principal amount of up to $50.0 million, as follows: (a) the second tranche in an aggregate principal amount of $20.0 million, funded upon the closing of the November 2020 Amendment, or Term B, and (b) the third tranche in an aggregate principal amount of $20.0 million to fund on or before September 30, 2021, subject to the initiation of a potentially registration-enabling trial for the Company’s therapeutic candidate, INBRX-109, in unresectable or metastatic conventional chondrosarcoma, pursuant to the terms of the November 2020 Amendment, or Term C. The terms of Term A under the 2020 Loan Agreement were modified to align with Term B pursuant to the November 2020 Amendment.

On June 18, 2021, the Company entered into an additional amendment to the 2020 Loan Agreement, or the June 2021 Amendment (collectively with the November 2020 Amendment, the Amended 2020 Loan Agreement). Pursuant to the June 2021 Amendment, the principal amount of the Term C Loan was increased from $20.0 million to $40.0 million. All terms of the Term C Loan align with the existing terms of the Term A and Term B Loans. Upon execution of the June 2021 Amendment and based on the initiation of a potentially registration-enabling trial in unresectable or metastatic conventional chondrosarcoma, the Company drew the Term C Loan and received $40.0 million in gross proceeds, net of $0.01 million of debt issuance costs.

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As of December 31, 2021 the Company has $70.0 million in gross principal outstanding in term loans under the Amended 2020 Loan Agreement. The outstanding term loans will mature on November 1, 2025, or the Amended Maturity Date, and bear interest at a floating per annum rate equal to the greater of (1) 7.96% and (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 7.80%. The repayment schedule provides for interest-only payments until January 1, 2025. The interest-only period is followed by 11 months of equal payments of principal and interest. Upon the Amended Maturity Date, a final payment of 9.0% of the original principal amount will be due to Oxford. This final payment of $6.3 million is being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method. The Company has the option to prepay the outstanding balance of the term loans in full prior to the Amended Maturity Date, subject to a prepayment fee ranging from 1.0% to 3.0%, depending upon the timing of the prepayment. All other terms of the original 2020 Loan Agreement remain outstanding.

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following (in thousands).

	AS OF DECEMBER 31,
	2021		2020
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		—
Less: Debt discount	(5,830)		(3,456)
Total debt	70,470		29,244
Less: Current portion, including debt discount	—		—
Long-term debt, including debt discount	$	70,470	$	29,244

Through 2024, the Company is only required to make interest payments on the outstanding principal balance, with future principal payments and final fee payments beginning in 2025, as follows (in thousands):

	AS OF DECEMBER 31, 2021
	2021
2025	$	76,300
Total future minimum payments	76,300
Less: unamortized debt discount	(5,830)
Total debt	$	70,470

In November 2020 and June 2021, the Company evaluated the amendments and determined they should be treated as modifications of the original 2020 Loan Agreement since the terms and resulting cash flow were not substantially changed in either the November 2020 Amendment or the June 2021 Amendment. The Company will continue to amortize the existing debt discounts prior to modification through the Amended Maturity Date.

The Company’s obligations under the Amended 2020 Loan Agreement are secured by a first priority security interest of substantially all of the Company’s assets, other than its intellectual property. The Amended 2020 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans. Additionally, following the June 2021 Amendment, the Amended 2020 Loan Agreement requires a minimum cash balance of $20.0 million to be maintained in a collateral account. As of December 31, 2021, the Company is in compliance with all covenants under the Amended 2020 Loan Agreement and has not received any notification or indication from Oxford of an intent to declare the loan due prior to maturity.

Concurrently with the debt issuance in July 2020, the Company issued to Oxford warrants to purchase shares of the Company’s capital stock equal to 1.25% of the funded amount, or $125,000. Upon issuance, the warrants were

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exercisable for preferred stock and were classified as liabilities pursuant to Topic ASC 480 at their fair value of $0.12 million. Upon the consummation of the Company’s IPO in August 2020, the Company remeasured the warrants and determined a fair value of approximately $0.14 million. The change in fair value was recorded as a change in fair value of warrant liabilities within other income in the Company’s consolidated statements of operations during the year ended December 31, 2020. As of December 31, 2021 and 2020, the warrants are equity-classified and are exercisable for 7,354 shares of common stock of the Company at $17.00 per share.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment. Interest expense was approximately $5.4 million and $0.9 million for the years ended December 31, 2021 and 2020, respectively, as related to the Amended 2020 Loan Agreement. Interest expense was approximately $44,000 for the year ended December 31, 2020 as related to the Company’s previous loan and security agreement, as amended, or the 2015 Loan Agreement, with Oxford. The Company recorded no interest expense for the year ended December 31, 2021 related to the 2015 Loan Agreement since it was paid in full in March 2020.

4. CONVERTIBLE PROMISSORY NOTES

In May 2019, the Company issued the 2019 Note in the aggregate principal amount of $40.0 million to Viking in a private placement transaction. The 2019 Note began to accrue interest in February 2020 at a rate of 1.5% per month. In April 2020, the Company issued the 2020 Notes in the aggregate principal amount of $15.0 million to Viking and certain other investors in a private placement transaction. Upon issuance, the 2020 Notes accrued interest at a rate of 1.0% per month.

Conversion Upon IPO

On August 21, 2020, the Company completed its IPO. The aggregate total balance of the 2019 Note, or $43.7 million, converted at the fixed price of $14.35 per share, resulting in the issuance of 3,046,467 shares of common stock to the holder. The aggregate total balance of the 2020 Notes, or $15.7 million, converted at a fixed price of $12.56 per share, resulting in the issuance of 1,248,136 shares of common stock to the holders.

The conversion of the 2019 Note and the 2020 Notes were evaluated for contingent BCFs under ASC Topic 470-20, Debt With Conversion and Other Options. See discussion of debt discount below for evaluation upon conversion.

Derivative Liabilities

The terms of the 2019 Note and the 2020 Notes contained alternative conversion options to the IPO upon the consummation of certain events, each of which had its own conversion prices and terms. The Company determined certain settlement features qualified as conversion features not meeting the requirements for separate accounting as embedded derivatives, while others qualified as redemption features meeting the requirements for separate accounting which were accounted for as derivative instruments.

Upon issuance of the 2019 Note and the 2020 Notes, the Company recorded derivative liabilities with corresponding debt discounts on the consolidated balance sheets at the estimated fair value of the bifurcated compound liabilities. The Company remeasured the fair value at each reporting period. Changes in the probability of each embedded redemption feature drove changes in the fair value of the derivative liabilities and had a corresponding impact on the Company’s net loss. During the second quarter of 2020, the fair value of the derivatives were determined to be zero based upon the expected conversion of the notes via an embedded conversion feature which did not meet the definition of a derivative. Upon conversion of the 2019 Note and the 2020 Notes in August 2020 upon completion of the Company’s IPO, the derivative liabilities were extinguished. No additional expense was recorded at extinguishment since the derivative liabilities had already been assessed to have zero value. During the year ended December 31, 2020, the Company recorded other income of $2.7 million related to changes in fair value of derivative liabilities in the consolidated statements of operations.

Debt Discount

Upon issuance of the 2019 Note and the 2020 Notes, the Company recorded debt discounts related to BCFs, as well as derivative liabilities and debt issuance costs. Prior to conversion, the debt discounts were amortized over the life

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of the notes. Amortization of the debt discount from inception of the 2019 Note until conversion of the 2019 Note and the 2020 Notes upon IPO was $8.7 million. At the time of conversion, the 2019 Note and the 2020 Notes had unamortized discounts of $6.9 million and $2.7 million, respectively.

Upon conversion of the 2019 Note and the 2020 Notes, the Company remeasured the intrinsic value of the BCFs which resulted in a reversal of the remaining unamortized discounts associated with the BCFs, resulting in a $7.4 million impact to additional paid-in-capital. Additionally, the Company accelerated the unamortized debt discounts related to the debt issuance costs and the derivative liabilities, resulting in a $2.2 million charge to interest expense during the third quarter of 2020.

5. STOCKHOLDERS’ EQUITY (DEFICIT)

Amended and Restated Certificate of Incorporation

On August 21, 2020 upon completion of the IPO, the Company’s certificate of incorporation was amended and restated to authorize 120,000,000 shares of common stock and 15,000,000 shares of preferred stock, each with a par value of $0.0001 per share.

Convertible Preferred Stock

In connection with the completion of the Company’s IPO in August 2020, all of the outstanding shares of convertible preferred stock were converted into 7,211,086 shares of the Company’s common stock. Prior to its conversion to common stock, the convertible preferred stock was classified as temporary, or mezzanine, equity on the accompanying consolidated balance sheets since the shares contained certain redemption features that were not solely within the control of the Company. The Company had not previously accreted the convertible preferred stock to its redemption value since the shares were not currently redeemable and redemption was not deemed to be probable.

No convertible preferred stock was authorized or issued as of December 31, 2021 or December 31, 2020.

Common Stock

In September 2021, the Company entered into the Sales Agreement with the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. Pursuant to the Sales Agreement, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. As of December 31, 2021, the Company has sold 921,042 shares under the ATM Offering for net proceeds of $40.2 million, after deducting commissions of $1.2 million. In connection with the ATM Offering, the Company incurred an additional $0.5 million of expenses which were offset against the proceeds of the offering.

Common Stock Warrants

As discussed in Note 3, the Company issued warrants to Oxford concurrently with the 2020 Loan Agreement. Upon the consummation of the Company’s IPO in August 2020, the warrants are exercisable for 7,354 shares of common stock of the Company at $17.00 per share. As of December 31, 2021, the warrants are equity-classified and reflected in additional paid-in-capital at $0.14 million. The fair value of the warrants was determined using the Black-Scholes model on the date of reclassification. No subsequent remeasurement is required for equity-classified warrants.

6. EQUITY COMPENSATION PLANS

Stock Incentive Plan

The Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards. As of December 31, 2021, an aggregate of 4.5 million shares of common stock were reserved for issuance under the 2017 Plan, of which 0.1 million were available.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant. The Company grants options with an exercise price equal to

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the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the year ended December 31, 2021 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2020	2,525	$	11.80
Granted	2,307	$	32.00
Forfeited	(410)	$	23.09
Exercised	(358)	$	11.05
Outstanding as of December 31, 2021	4,064	$	22.19	8.3	$	87,303
Vested and exercisable as of December 31, 2021	1,253	$	11.37	7.1	$	40,468

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and 2020 was $7.5 million and $19,000, respectively. Aggregate intrinsic value of stock options exercised and outstanding is calculated using the fair value of common stock on the date of exercise and as of December 31, 2021, respectively.

Stock-Based Compensation Expense

Stock options are valued using the Black-Scholes Merton option pricing model on the date of grant. This option pricing model involves a number of estimates, including the expected lives of the stock options, the Company’s anticipated stock volatility, and interest rates. Stock-based compensation expense is recognized using the straight-line method over the vesting period. The Company recognizes forfeitures as they occur.

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the years ended December 31, 2021 and 2020 were as follows. 

	YEAR ENDED DECEMBER 31,
	2021			2020
Risk-free interest rate	0.71		%	0.42		%
Expected volatility	93.49		%	97.72		%
Expected dividend yield	—		%	—		%
Expected term	6.08			6.08
Weighted average fair value	$	24.20		$	10.82

The Company determines the assumptions used in the option pricing model in the following manner:

Risk-Free Interest Rate—For the determination of the risk-free interest rates, the Company utilizes the U.S. Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption.

Expected Volatility—Due to the Company’s limited historical stock price volatility data, the Company based its estimate of expected volatility on the estimated and expected volatilities of a guideline group of publicly traded companies. For these analyses, the Company selected companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the

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selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected Dividend—The expected dividend yield is assumed to be zero since the Company has never paid dividends and does not have current plans to pay any dividends on its common stock.

Expected Term—The Company estimates the expected term of its stock options granted to employees and non-employee directors using the simplified method, whereby, the expected term equals the average of the vesting term and the original contractual term of the option. The Company utilizes this method since it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

Prior to the Company’s IPO, given the absence of a public trading market for the Company’s common stock, its board of directors exercised their judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of the Company’s common stock underlying the stock options, such as: contemporaneous valuations performed by independent third-party specialists, its stage of development, including the status of its research and development efforts of its therapeutic candidates and the material risks related to its business and industry, its results of operations and financial condition, including its levels of capital resources, the prices at which its sold shares of its convertible preferred stock, the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock, the conditions in the biotechnology industry and the economy in general, the stock price performance and volatility of comparable life sciences public companies, as well as recently completed mergers and acquisitions of peer companies, the likelihood of achieving a liquidity event for the holders of its common stock or convertible preferred stock, such as an IPO or a sale of the Company given prevailing market conditions, trends and developments in its industry, external market conditions affecting the life sciences and biotechnology sectors, and the lack of liquidity of its common stock, among other factors.

Subsequent to the Company’s IPO, the fair value of the Company’s common stock is determined based on its closing market price on the date of the grant. The Company’s board of directors intended all options granted to be exercisable at a price per share not less than the per share fair value of its common stock underlying those options on the grant date.

Stock-based compensation expense for stock options consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	11,830	$	4,300
General and administrative	3,218		723
Total stock-based compensation expense	$	15,048	$	5,023

As of December 31, 2021, the Company had $47.0 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.04 years.

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7. LICENSE AND GRANT REVENUES

The following table summarizes the total revenue recorded in the Company’s consolidated statements of operations (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
License fee revenue from affiliates
Elpiscience Biopharmaceuticals, Inc.	$	—	$	2,000
Total license fee revenue from affiliates	—		2,000
License fee revenue from non-affiliates
2seventy bio, Inc.	4,200		400
Phylaxis BioScience, LLC	2,392		1,993
Chiesi Farmaceutici S.p.A.	533		7,365
Other license revenues from non-affiliates	—		1,050
Total license fee revenue from non-affiliates	7,125		10,808
Grant revenue
Congressionally Directed Medical Research Program	106		80
Total grant revenue	106		80
Total revenue	$	7,231	$	12,888

License and Collaboration Agreements

Elpiscience

In April 2018, the Company entered into a separate License Agreement, or the OX40 License Agreement, with Elpiscience Biopharmaceuticals, Inc., or Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. This license provides Elpiscience with the right to further advance the therapeutic candidate through clinical trials, as well as manufacture and commercialize it. It also requires the Company to provide Elpiscience with know-how and materials specific to INBRX-106, including process development and manufacturing data and information necessary to develop INBRX-106. In the OX40 License Agreement, the Company also agreed to negotiate an agreement to supply Elpiscience with INBRX-106 for its development in Mainland China, Hong Kong Macau and Taiwan. The Company is eligible to receive certain developmental and commercial milestones of up to an aggregate of $100.0 million, as well as percentage tiered royalties on future product sales with rates in the high single-digits. Due to the uncertainty in the achievement of the developmental and commercial milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. This will be re-assessed at each reporting period.

In September 2020, the Company achieved a milestone under the contract for $2.0 million, which was received during September 2020. The Company recognized revenue of $2.0 million during the year ended December 31, 2020. No revenue was recognized related to this agreement during the year ended December 31, 2021.

2seventy bio, Inc.

2018 License Agreement

On December 20, 2018, the Company entered into a License Agreement with bluebird bio, Inc., or bluebird, whereby the Company granted bluebird the exclusive, worldwide rights to develop, manufacture, and commercialize certain cell therapy products containing binders. In November 2021, bluebird assigned the agreement, or the 2018 2seventy Agreement, to its affiliate, 2seventy bio, Inc., or 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under this agreement, the Company is entitled to receive specified development milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on

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future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

In July 2021, a milestone event under the 2018 2seventy Agreement was achieved and the Company recognized $2.0 million of revenue at that point in time. The Company received the associated $2.0 million payment in August 2021. During the year ended December 31, 2021, the Company recognized a total of $2.0 million in revenue related to this agreement. During the year ended December 31, 2020, the Company recognized no revenue related to this agreement.

2020 Option and License Agreement

In June 2020, the Company entered into an Option and License Agreement with bluebird, pursuant to which the Company granted to bluebird exclusive worldwide development licenses to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs. The Company retains all rights to the specific sdAbs outside of the cell therapy field. This agreement, or the 2020 2seventy Agreement, was also assigned to 2seventy in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy.

In June 2020, the Company received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and is entitled to an upfront option fee for each additional program, on a program-by-program basis. The Company also granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option. In connection with each program for which 2seventy exercises its option, 2seventy will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions for each option 2seventy chooses to exercise. The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

As of the effective date of the 2020 2seventy Agreement, the Company identified one performance obligation, which was the transfer of the exclusive development license to bluebird for the two initial programs. The Company determined that the option granted for an exclusive license in the future was not a material right. For the eight programs not identified upon execution of the contract, the Company evaluated the customer option for additional purchases and determined that those options for additional programs did not constitute material rights nor variable consideration. As additional programs are identified, the Company will re-assess its performance obligations and transaction price accordingly.

The Company determined the total transaction price of the 2020 2seventy Agreement at execution was $0.4 million for the transfer of the two exclusive development licenses. The Company recognized $0.4 million of revenue related to this agreement at the point in time in which the exclusive development licenses were transferred to bluebird, which occurred upon execution of the agreement in June 2020.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. The Company recognized the $0.1 million of revenue related to this extension in May 2021, the point in time in which the extension was granted.

In October 2021, pursuant to the option exercise terms in the 2020 2seventy Agreement, the Company received a $2.1 million option exercise fee for one of the initial programs and transferred an exclusive license for the program

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and recognized the $2.1 million of revenue related to this option exercise at the point in time in which the exclusive license was transferred.

During the years ended December 31, 2021 and 2020, the Company recognized $2.2 million and $0.4 million of revenue related to this agreement, respectively.

Phylaxis Agreements

In July 2020, the Company entered into a joint venture with an entity affiliated with ArrowMark Partners, Phylaxis BioScience, LLC, or Phylaxis. In connection with the joint venture, the Company entered into the following agreements: Contribution Agreement, License Agreement, Limited Liability Company Agreement, and Master Services Agreement, or collectively the Phylaxis Agreements, pursuant to which the Company licensed certain intellectual property and know-how to Phylaxis and agreed to provide services to develop certain compounds. Upon closing, the Company received a $2.5 million nonrefundable, upfront payment from Phylaxis under the Master Services Agreement, or the MSA. The Company has also received an additional $2.5 million, which was payable within 180 days from closing under the MSA, in two payments of $1.25 million each, received in October 2020 and January 2021. Upon closing, the Company received a 10% equity interest in Phylaxis as consideration for the contribution of the license of the Company’s intellectual property and know-how and is entitled to receive an additional 5% based on the achievement of certain milestones. Under the License Agreement, the Company is also entitled to specified development and commercialization milestone payments of up to an aggregate of $225.0 million and $175.0 million, respectively. The Company is also entitled to share in a percentage of the profits of Phylaxis under the Limited Liability Company Agreement.

In order to determine the fair value of the equity interest in Phylaxis, the Company engaged a third-party valuation specialist. The valuation report utilized a market approach to establish the total equity value of Phylaxis using inputs not observable in the market, including the discount rate. The fair value of the equity interest was $0.5 million, which has been accounted for under the equity method. The fair value of the equity interest upon the execution of the agreements has been included in the transaction price, along with the $5.0 million of payments due pursuant to the MSA.

The Company identified the transfer of the exclusive licenses for, and performance of, development services to modify the first and second compounds as one performance obligation and allocated the transaction price evenly between the two compounds. Revenue related to the performance obligation will be recognized over time as services are performed, based on the Company’s progress to satisfy the performance obligation.

During the years ended December 31, 2021 and 2020, the Company recognized $2.4 million and $2.0 million of revenue related to this performance obligation, respectively. As of December 31, 2021, the Company has $1.1 million of deferred revenue related to this agreement, all of which is classified as current. As of December 31, 2020, the Company had $1.6 million and $0.6 million of current and non-current deferred revenue related to this agreement, respectively.

Chiesi

In May 2019, the Company entered into an Option Agreement, as amended by the First Amendment to Option Agreement, dated August 19, 2019, or the Chiesi Option Agreement, with Chiesi Farmaceutici S.p.A., or Chiesi, pursuant to which the Company granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Under the terms of the Chiesi Option Agreement, the Company received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. If Chiesi chooses to exercise its option under the Chiesi Option Agreement, then Chiesi must pay the Company a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, the Company may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

The Company has identified one performance obligation as of the effective date of the Chiesi Option Agreement, which is to perform research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by the Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the

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Company’s delivery to Chiesi of the finalized minutes from the definitive U.S. Food and Drug Administration, or FDA, scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel European Medicines Agency health technology assessment, or EMA-HTA, scientific advice meeting conducted following completion of such Phase I Clinical Trial. The Company has determined that the option to grant a license in the future is not a material right.

The $10.0 million upfront payment has been allocated to the single performance obligation. Revenue is recognized over time as services are performed during the option period, based on the Company’s effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period. During the years ended December 31, 2021 and 2020, the Company recognized $0.5 million and $7.4 million in revenue related to this agreement, respectively. As of December 31, 2021, the Company has $0.9 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively. As of December 31, 2020, the Company had $1.4 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively.

Celgene

In June 2012, the Company entered into a Development and Option Agreement with Celgene whereby the Company granted Celgene an option to exclusively license certain intellectual property rights relating to the Company’s CD47 checkpoint inhibitor. Upon grant of the Development and Option Agreement, Celgene made a non-refundable upfront option payment for the exclusive license. In June 2013, Celgene opted to exercise its right to license the intellectual property rights associated with the Company’s CD47 therapeutic. The Company is also eligible to receive certain developmental and commercial milestones of an aggregate of $934.1 million, assuming the achievement of all potential milestones in the agreement, as well as percentage tiered royalties based on future worldwide sales, with rates ranging between the high single-digits and low teens. The Company is obligated to pay 2% of future amounts received under the Development and Option Agreement to advisors who assisted the Company with the negotiation and other matters in connection with the Development and Option Agreement.

Due to the uncertainty in the achievement of the developmental and commercial milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. This will be re-assessed at each reporting period. No revenue was recognized under this agreement during the years ended December 31, 2021 and 2020.

Government Grants

Grant revenue was recognized in accordance with the Company’s stated methodology discussed in Note 1.

CDMRP funded through the DoD

During September 2018, the Company was awarded a grant by the CDMRP funded through the DoD by the U.S. Army Medical Research Acquisition Activity in the amount of approximately $0.3 million for the continued development of multi-specific antibodies for the treatment against Acinetobacter baumannii infection by circumventing development of bacterial resistance, or the 2018 DoD grant. The work under this grant began in December 2018 and was completed in September 2020. In February 2021, the Company was awarded an additional grant from the DoD in the amount of approximately $0.3 million for the development of sdAb based therapeutics targeting SARS-CoV-2 Spike protein for the treatment of COVID-19, or the 2021 DoD grant. Work under the grant began in February 2021 and is expected to continue through February 2022.

Revenue from these grants is based upon internal and subcontractor costs incurred by the Company that are specifically covered by the grants, and where applicable, an additional facilities and administrative rate that provided funding for overhead expenses. Revenue is recognized when the Company incurs these covered expenses related to the grant’s continued progression. The Company submits requests for reimbursement to the DoD for only those expenses which have been incurred by the Company in each period, resulting in reimbursement in arrears.

As of December 31, 2021, $0.3 million has been recognized to date under the 2018 DoD grant, all of which has been received in cash from the DoD. As of December 31, 2021, $106,000 has been recognized to date under the 2021

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DoD grant, $86,000 of which has been received in cash from the DoD. During each of the years ended December 31, 2021 and 2020, $106,000 and $80,000 was recognized as revenue under the grants, respectively.

8. RELATED PARTY TRANSACTIONS

From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Company’s Board of Directors or a committee thereof pursuant to policy.

LAV Summit Limited

LAV Summit Limited, or LAV SL, a limited company, is a principal shareholder owning more than 5% of the Company’s outstanding equity interest during the year ended December 31, 2021. Due to this equity ownership, LAV SL was considered a related party. LAV SL’s General Partner, Lilly Asia Ventures, or LAV, through one of its funds, holds a significant equity ownership position in Elpiscience, and the Venture Partner of LAV is the CEO, Founder, and Director at Elpiscience. Accordingly, the Company identified Elpiscience as a related party. As of December 31, 2021, LAV SL no longer holds more than 5% of the Company’s outstanding equity interest.

Elpiscience

In April 2018, the Company entered into the OX40 License Agreement with Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. Under this agreement, the Company is entitled to reimbursement for certain chemistry, manufacturing, and controls, or CMC, and toxicology expenses incurred for which Elpiscience has paid the Company approximately $5.2 million to date as of December 31, 2021. As of December 31, 2021, the Company has $0.2 million recorded as receivables from related parties from Elpiscience for expenses incurred which have not yet been reimbursed. Additional reimbursements of approximately $38,000 related to multi-year stability studies are expected to be recognized and paid upon completion. During the year ended December 31, 2021, the Company received no reimbursements for expenses already incurred. During the year ended December 31, 2020, the Company received reimbursements of $0.2 million for expenses already incurred. During the year ended December 31, 2021, the Company did not derecognize any expenses related to these reimbursements under the OX40 License Agreement. During the year ended December 31, 2020, the Company derecognized approximately $0.2 million of expenses related to these reimbursements under the OX40 License Agreement, respectively.

In July 2020, the Company entered into an additional cost sharing agreement with Elpiscience related to the OX40 License Agreement. Under this agreement, the Company is entitled to reimbursement for certain formulation development costs. Through December 31, 2021, the Company has received $0.2 million of reimbursements for expenses already incurred under this agreement. As of December 31, 2021, the Company has approximately $0.3 million recorded as receivables from related parties from Elpiscience for expenses incurred which have not yet been reimbursed. During the year ended December 31, 2021, the Company received reimbursements of $0.2 million for expenses already incurred. During the year ended December 31, 2021, the Company did not derecognize any expenses related to this agreement. During the year ended December 31, 2020, the Company received no reimbursements. During the year ended December 31, 2020, the Company derecognized $0.3 million of expenses related to this agreement.

In July 2021, the Company entered into a Sale and Purchase Agreement with Elpiscience, in which the Company sold drug substance supply to Elpiscience for approximately $37,000, for which it derecognized expenses during the year ended December 31, 2021. As of December 31, 2021, the Company has $37,000 recorded as receivables from related parties for this purchase.

9. INCOME TAXES

The components of income tax expense (benefit) were as follows for the years ended December 31, 2021 and 2020, respectively (in thousands):

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	YEAR ENDED DECEMBER 31,
	2021		2020
Current expense:
State	$	2	$	3
Total current expense	$	2	$	3

The provision for the years ended December 31, 2021 and 2020 was related to California state income tax.

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2021 and 2020 as follows (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Expected income tax benefit at federal statutory rate	$	(17,171)	$	(15,985)
State income tax expense (benefit), net of federal benefit	(1,006)		4,548
Permanent items	(207)		2,291
R&D credits	(1,912)		(2,878)
Unrecognized tax benefits (FIN 48)	691		707
Return to provision true-ups	165		164
Valuation allowance	19,442		11,156
Income tax expense	$	2	$	3

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

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The components of net deferred income taxes were as follows (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Deferred income tax assets
Net operating loss carryforward	$	43,440	$	27,055
Research and development credits	8,539		6,465
Intangibles	3,875		4,176
Accruals	257		233
Stock compensation	1,888		409
Deferred revenue	456		806
Operating lease liabilities	1,428		1,733
Other	14		3
Gross deferred tax assets	59,897		40,880
Less: Valuation allowance	(58,528)		(39,087)
Total deferred tax assets	1,369		1,793
Deferred income tax liabilities
Fixed assets	(20)		(140)
Operating lease right-of-use assets	(1,349)		(1,653)
Total deferred tax liabilities	(1,369)		(1,793)
Net deferred tax assets (liabilities)	$	—	$	—

As of December 31, 2021, the Company had unused federal and state NOL carryforwards of approximately $198.9 million and $24.5 million, respectively. The federal NOL carryforwards may be carried forward indefinitely but are only available to offset up to 80% of pre-NOL taxable income each year. The state NOL carryforwards will begin to expire in 2038, if not utilized. As of December 31, 2021, the Company also had federal and state research tax credit carryforwards of $8.3 million and $3.9 million, respectively. The federal research tax credit carryforwards begin to expire in 2038, while the state carryforwards have no expiration.

The utilization of NOL and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

The Company has established a full valuation allowance against its deferred tax assets due to uncertainties that preclude it from determining that it is more likely than not that the Company will be able to generate sufficient taxable income to realize such assets. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2021. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. Based on this evaluation, as of December 31, 2021, a valuation allowance of $58.5 million has been recorded in order to measure only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be

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given to subjective evidence, such as estimates of future taxable income during carryforward periods and the Company’s projections for growth.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Beginning balance	$	2,155	$	1,499
Increases related to current year tax positions	691		656
Ending balance	$	2,846	$	2,155

As of December 31, 2021, the Company had gross unrecognized tax benefits of $2.8 million, none of which would affect the effective tax rate due to the existence of a full valuation allowance. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within the next 12 months. The Company’s policy is to recognize the interest expense and/or penalties related to income tax matters as a component of income tax expense. The Company had no accrual for interest or penalties on its consolidated balance sheets as of December 31, 2021 or December 31, 2020, and has not recognized interest and/or penalties in its consolidated statements of operations for the years ended December 31, 2021 and 2020 as the unrecognized tax benefits relate to tax positions for which no cash tax liability has been reduced.

The Company is subject to income taxes in the United States and various state jurisdictions. The Company’s tax years from 2018 and forward are subject to examination by the United States and state tax authorities. The Company has not been, nor is it currently, under examination by the U.S. federal or any state tax authority.

10. LEASES

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement for approximately 34,000 square feet as its sole location in La Jolla, California. The lease expires in June 2025 with an option to extend the lease an additional five years. The lease contained an initial base rent of approximately $0.1 million per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities by approximately 9,000 square feet and began occupying this space in January 2020. The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $30,000 per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The right-of-use asset and operating lease liability as of December 31, 2021 and 2020 are as follows:

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	AS OF DECEMBER 31,
	2021		2020
Right-of-use asset	$	6,338	$	7,831
Operating lease liability
Current	1,674		1,503
Non-current	5,033		6,707
Total operating lease liability	$	6,707	$	8,210

During each of the years ended December 31, 2021 and 2020, the Company recognized operating lease expense of $3.1 million. As of December 31, 2021 and 2020, the Company’s operating lease had a remaining term of 3.5 and 4.5 years, respectively.

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 8.2% as of December 31, 2021 and 2020.

Future minimum rental payments under operating leases are as follows (in thousands):

	AS OF DECEMBER 31,
	2021
2022	2,161
2023	2,203
2024	2,247
2025	1,137
Total future minimum lease payments	$	7,748
Less: imputed interest	(1,041)
Present value of operating lease liability	6,707
Less: current portion of operating lease liability	(1,674)
Non-current portion of operating lease liability	$	5,033

11. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is not party to any material legal proceedings. From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification obligation will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.

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Purchase Commitments

The Company has several ongoing contracts with CROs for preclinical studies and clinical trials and with CDMOs for clinical supplies and manufacturing scale-up activities. These contracts are generally cancellable, with notice, at the Company’s option. The Company recorded accrued expenses of approximately $7.4 million and $11.5 million in its consolidated balance sheets for expenditures incurred by CROs and CDMOs as of December 31, 2021 and December 31, 2020, respectively.

While these contracts are generally cancellable, some may contain specific activities that involve one or more non-cancellable commitments, including minimum purchase commitments, binding annual forecasts, and capital equipment investments. Additionally, depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from cost of work performed to date and up to twelve months of future committed manufacturing costs. As of December 31, 2021 and December 31, 2020, the non-cancellable portion of these contracts total in aggregate, excluding amounts recorded in accounts payable and accrued expenses at each respective date, was approximately $2.4 million and $7.0 million, respectively. During the years ended December 31, 2021 and 2020, the Company incurred $1.0 million and $30.2 million of expenses related to these agreements, respectively.

Other Commitments

Additionally, as of December 31, 2021 and December 31, 2020, Mark P. Lappe, the Company’s Chief Executive Officer, Brendan P. Eckelman, the Company’s Chief Scientific Officer, and Kelly D. Deck, the Company’s Chief Financial Officer, and certain other members of management have agreements that provide for severance compensation in the event of termination or a change in control.

12. SUBSEQUENT EVENTS

For the audited consolidated financial statements as of December 31, 2021, the Company evaluated subsequent events to assess the need for potential recognition or disclosure in this report. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these consolidated financial statements, other than disclosures related to those outlined below.

Stock Option Issuance

During January and February 2022, the Company granted stock options to purchase an aggregate of 0.8 million common shares at a weighted average exercise price of $33.84 per share to employees under the 2017 Equity Incentive Plan. The Company granted these options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

Amendment to the 2020 Loan Agreement with Oxford

On February 18, 2022, the Company entered into an additional amendment to the 2020 Loan Agreement, or the February 2022 Amendment. The February 2022 Amendment provides for four additional tranches of term loans in an aggregate principal amount of up to $200.0 million, as follows: (a) an aggregate principal amount of $110.0 million, which includes the $70.0 million already outstanding; the incremental $40.0 million principal amount funded upon the closing of the February 2022 Amendment, or Term D, (b) an aggregate principal amount of $30.0 million, funded upon initiation of Part 4 of the INBRX-105 Phase 1 clinical trial, or Term E, (c) an aggregate principal of $30.0 million, funded upon the reception of positive topline Phase 1 data from INBRX-101 in AAT, or Term F, and (d) an aggregate principal amount of $30.0 million, funded upon the initiation of an INBRX-101 potential registration-enabling trial in AAT, or Term G. In accordance with the February 2022 Amendment, the Company paid a one-time amendment fee of $1.1 million, which is equal to the amount accreted for the final payment on the existing tranches at the time of the amendment. The terms of the three existing tranches under the Amended 2020 Loan Agreement were modified to align with the four additional tranches under the February 2022 Amendment.

The outstanding term loans will mature on January 1, 2027 and bear interest at the greater of (1) 8.30% and (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 8.19%. The repayment

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schedule provides for interest-only payments through February 1, 2025, with principal payments beginning on March 1, 2025. The interest-only payments may be extended by 12 months through February 2026, with principal payments beginning on March 1, 2026, if the Company raises at least $100.0 million in upfront licensing or partnership proceeds by February 2025. The interest-only period is followed by 23 months of equal payments of principal plus interest, or if the interest-only period is extended, by 11 months of equal payments of principal plus interest. Upon the maturity date of January 1, 2027, a final payment of 9.0% of the total principal amount will be due to Oxford. The Company has the option to prepay the outstanding balance of the term loan in full prior to maturity, subject to a prepayment fee ranging from 1.0% to 3.0%, depending on the timing of the prepayment. The Company granted Oxford a first priority lien against all of its assets with a positive lien on intellectual property. All other terms of the Amended 2020 Loan Agreement remain outstanding.

Concurrently with the debt issuance upon the February 2022 Amendment, the Company issued to Oxford warrants to purchase 40,000 shares of the Company’s common stock at a strike price of $45.00 per share.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were designed and operating effectively at the reasonable assurance level.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control over Financial Reporting

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as amended, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

150

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control-Integrated Framework.

Based on our assessment, management believes that, as of December 31, 2021, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm has issued an audit report on our assessment of the Company’s internal control over financial reporting. This report appears further below in this Item 9A.

151

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Inhibrx, Inc.

La Jolla, California

Opinion on Internal Control over Financial Reporting

We have audited Inhibrx, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

152

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP

San Diego, California

February 28, 2022

153

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

154

Part III.

Item 10. Directors, Executive Officers and Corporate Governance.

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Management and Corporate Governance” and “Code of Conduct and Ethics” in our proxy statement for the 2022 annual meeting of stockholders.

Item 11. Executive Compensation.

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Executive Officer and Director Compensation” in our proxy statement for the 2022 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our proxy statement for the 2022 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Certain Relationships and Related Person Transactions” and “Management and Corporate Governance” in our proxy statement for the 2022 annual meeting of stockholders.

Item 14. Principal Accountant Fees and Services

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Independent Registered Public Accounting Firm” in our proxy statement for the 2022 annual meeting of stockholders.

155

Part IV.

Item 15. Exhibits and Financial Statement Schedules

Exhibits

The exhibits listed in the accompanying “Index to Exhibits” below are filed or incorporated by reference as part of this Annual Report.

Financial Statement Schedules

See “Index to Consolidated Financial Statements” at Item 8 to this Annual Report. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.

156

Index to Exhibits

Exhibit No.	Description of Exhibit	Filed Herewith	Form	Incorporated By Reference File No.	Date Filed
3.1	Amended and Restated Certificate of Incorporation.		8-K	001-39452	8/21/2020
3.2	Amended and Restated Bylaws.		8-K	001-39452	8/21/2020
4.1	Form of Common Stock Certificate.		S-1	333-231907	6/3/2019
4.2	Second Amended and Restated Investors’ Rights Agreement, dated April 6, 2020, by and among the Registrant and the investors named therein.		S-1	333-240135	7/28/2020
4.3^	Form of Warrant to Purchase Stock by and between the Registrant and Oxford Finance LLC.		S-1	333-240135	7/28/2020
4.4	Description of the Registrant’s Securities.		10-K	001-39542	3/12/2021
10.1Δ	Form of Indemnification Agreement.		S-1	333-240135	7/28/2020
10.2Δ	Second Amended and Restated Executive Employment Agreement, effective as of January 1, 2022, by and between the Registrant and Mark Lappe.		10-Q	001-39452	11/09/2021
10.3Δ	Second Amended and Restated Executive Employment Agreement, effective as of January 1, 2022, by and between the Registrant and Klaus Wagner, M.D., Ph.D.		10-Q	001-39452	11/09/2021
10.4Δ	Separation Letter Agreement, effective as of February 1, 2022, by and between the Registrant and Klaus Wagner, M.D., Ph.D.	X
10.5Δ	Second Amended and Restated Executive Employment Agreement, effective as of January 1, 2022, by and between the Registrant and Brendan Eckelman, Ph.D.		10-Q	001-39452	11/09/2021
10.6Δ	Amended and Restated Executive Employment Agreement, effective as of January 1, 2022, by and between the Registrant and Kelly Deck.		10-Q	001-39452	11/09/2021
10.7Δ	Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan.		S-1/A	333-240135	8/12/2020
10.8Δ	Form of Stock Option Grant Notice under the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan.		S-1	333-231907	6/3/2019
10.9Δ	Form of Restricted Stock Agreement under the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan.		S-1	333-231907	6/3/2019
10.10Δ	Non-Employee Director Compensation Policy.		S-1	333-240135	7/28/2020
10.11†	License Agreement, dated July 1, 2013, by and between INBRX 103, LLC and Celgene Corporation.		S-1	333-231907	6/3/2019
10.12	Amendment to License Agreement, dated November 23, 2018, by and among the Registrant, INBRX 103, LLC and Celgene Corporation.		S-1	333-231907	6/3/2019
10.13†	License Agreement, dated June 21, 2017, by and between the Registrant and Transcenta Holding Ltd.		S-1	333-231907	6/3/2019
10.14	Technical Services Agreement, dated March 19, 2018, by and between the Registrant and Transcenta Holding Ltd.		S-1	333-231907	6/3/2019

157

10.15	Technical Services Agreement, dated October 6, 2018, by and between the Registrant and Transcenta Holding Ltd.		S-1	333-231907	6/3/2019
10.16†	License Agreement, dated February 28, 2018, by and between the Registrant and Elpiscience Biopharmaceuticals, Inc.		S-1	333-231907	6/3/2019
10.17†	License Agreement, dated April 30, 2018, by and between the Registrant and Elpiscience Biopharmaceuticals, Inc.		S-1	333-231907	6/3/2019
10.18†	License Agreement, dated December 20, 2018, by and between the Registrant and bluebird bio, Inc.		S-1	333-231907	6/3/2019
10.19	Lease Agreement, dated September 8, 2017, by and between the Registrant and HCP TPSP, LLC.		S-1	333-231907	6/3/2019
10.20	First Amendment to Lease, dated May 21, 2019, by and between the Registrant and HCP TPSP, LLC.		S-1	333-231907	6/3/2019
10.21†	Option Agreement, dated May 29, 2019, by and between the Registrant and Chiesi Farmaceutici S.p.A.		S-1	333-231907	6/3/2019
10.22	First Amendment to Option Agreement, dated August 19, 2019, by and between the Registrant and Chiesi Farmaceutici S.p.A.		S-1/A	333-231907	8/20/2019
10.23†	Option and License Agreement, dated June 9, 2020, by and between the Registrant and bluebird bio, Inc.		S-1	333-240135	7/28/2020
10.24	Loan and Security Agreement, dated July 15, 2020, by and between the Registrant and Oxford Finance LLC.		S-1	333-240135	7/28/2020
10.25	First Amendment to Loan and Security Agreement, dated November 12, 2020, by and between the Registrant and Oxford Finance LLC.		10-Q	001-39452	11/13/2020
10.26	Third Amendment to Loan and Security Agreement, dated June 18, 2021, by and between the Registrant and Oxford Finance LLC		8-K	001-39452	6/21/2021
10.27	Fourth Amendment to Loan and Security Agreement, dated February 18, 2022, by and between the Registrant and Oxford Finance LLC		8-K	001-39452	2/22/2022
10.28†	Amended and Restated Master Services Agreement, dated August 28, 2018, by and between the Registrant and WuXi Biologics (Hong Kong) Limited.		S-1	333-231907	6/3/2019
10.29†	Amendment No. 1 to Amended and Restated Master Services Agreement, dated December 11, 2019, by and between the Registrant and WuXi Biologics (Hong Kong) Limited.		S-1	333-240135	7/28/2020
10.30	Open Market Sale Agreement℠ by and between Jefferies LLC and the Registrant dated September 3, 2021.		S-3ASR	333-259313	9/3/2021
21.1	Subsidiaries of the Registrant.		S-1	333-231907	6/3/2019
23.1	Consent of BDO USA, LLP, independent registered public accounting firm.	X
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X

158

31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101	X

^    Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.

†    Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

Δ    Management Compensation Plan or arrangement.

* This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

159

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

INHIBRX, INC.

/s/ Mark P. Lappe

Name:  Mark P. Lappe

Title:  Chief Executive Officer and Chairman

Date: February 28, 2022

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Mark P. Lappe	Chief Executive Officer and Chairman (principal executive officer)	February 28, 2022
Mark P. Lappe
/s/ Kelly D. Deck, C.P.A.	Chief Financial Officer (principal financial officer and principal accounting officer)	February 28, 2022
Kelly D. Deck, C.P.A.
/s/ Jon Faiz Kayyem, Ph.D.	Director	February 28, 2022
Jon Faiz Kayyem, Ph.D.
/s/ Douglas G. Forsyth	Director	February 28, 2022
Douglas G. Forsyth
/s/ Kimberly Manhard	Director	February 28, 2022
Kimberly Manhard
/s/ Kristiina Vuori, M.D., Ph.D.	Director	February 28, 2022
Kristiina Vuori, M.D., Ph.D.

160

EX-10.4

11025 N. Torrey Pines Rd

Suite 200

La Jolla, CA 92037

February 1, 2022

Via Hand Delivery

Klaus Wagner

Re: Final Day of Employment with Inhibrx

Dear Klaus:

In light of your resignation, this letter serves as confirmation that your employment with Inhibrx (the “Company”) is voluntarily terminated as of February 1, 2022 (the “Separation Date”). You have received or will receive payment on the Separation Date for all due and accrued wages earned through the Separation Date via the Company’s regular payroll direct deposit. You acknowledge that you are not entitled to severance or any other future payments.

If applicable, you may apply for unemployment with the State of California by accessing this website: https://www.edd.ca.gov/unemployment/Filing_a_Claim.htm.

Regarding your other benefits, your existing healthcare coverage will terminate on February 28, 2022, the last day of the month of your last day of employment. You will receive information regarding your entitlement to continue your health insurance at your own expense pursuant to COBRA under separate cover. If you are enrolled in the Inhibrx 401(k) Plan, shortly after your separation date, Fidelity will send you a letter notifying you that you are entitled to a distribution or rollover of your vested 401(k) balance, along with instructions to accomplish such distribution or rollover. Please follow the instructions provided. Alternatively, you may call Fidelity at 800-835-5097 any time.

You remain subject to the Proprietary Information and Inventions Agreement you signed in connection with your employment with the Company and agree to enter into that certain Release and Waiver of Claims. A copy of that Proprietary Information and Inventions Agreement and a copy of that Release and Waiver of Claims are enclosed herewith.

In light of your position as a Section 16 officer of the Company and your significant ownership interest in the Company, and in exchange for the Company’s promises and representations in this Agreement and in the enclosed Stock Option Extension Agreement and Mutual Waiver and Release Agreement, you agree that you will not sell or otherwise dispose of any Company stock beneficially owned by you prior to June 1, 2022. As of the Separation Date, you are not subject to any blackout period under the Company’s insider trading policy, and the above-mentioned restrictions will automatically terminate on June 1, 2022, at which time you will be free to sell or otherwise dispose of your Company Shares with no limitations. Notwithstanding the foregoing, you agree that you will not, directly or indirectly, buy or sell securities of the Company while in possession of material nonpublic information or engage in

any other action to take advantage of, or pass on to others, that information, in each case, subject to any exemptions under law or pursuant to a trading plan.

Upon receiving your signature to this letter, the Company agrees to extend the expiration date for the exercise of your vested stock options to February 1, 2023, pursuant to that certain Stock Option Extension Agreement by and between you and the Company. A copy of that Stock Option Extension Agreement is enclosed herewith.

You also agree to complete a D&O Questionnaire to enable the Company to accurately report certain biological and other information for the Company’s Securities and Exchange Commission (“SEC”) disclosures.

You acknowledge and agree that from and after the Separation Date, the Company is not obligated to prepare or file any disclosures or documents required by the SEC on your behalf.

Please sign below to indicate your agreement with the terms of this letter. The Company wishes you the very best in your future endeavors.

Sincerely,

/s/ Mark Lappe

Mark Lappe

CEO

Acknowledged and Agreed:

/s/ Klaus Wagner

Klaus Wagner

Date: February 1, 2022

Enclosure: Proprietary Information and Inventions Agreement

Waiver and Release

Stock Option Extension Agreement

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Inhibrx, Inc.

La Jolla, California

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (333-259313) and Form S-8 (No. 333-252214 and 333-248138) of Inhibrx, Inc. (the “Company”) of our reports dated February 28, 2022, relating to the consolidated financial statements, and the effectiveness of the Company’s internal control over financial reporting, which appears in this Annual Report on Form 10-K.

/s/ BDO USA, LLP

San Diego, California

February 28, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark P. Lappe, certify that:

1.I have reviewed this Annual Report on Form 10-K of Inhibrx, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2022	/s/ Mark P. Lappe
	Mark P. Lappe
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kelly D. Deck, certify that:

1.I have reviewed this Annual Report on Form 10-K of Inhibrx, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2022	/s/ Kelly D. Deck
	Kelly D. Deck, C.P.A.
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Inhibrx, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark P. Lappe, Chief Executive Officer and Chairman of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 28, 2022	/s/ Mark P. Lappe
	Mark P. Lappe
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Inhibrx, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kelly D. Deck, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 28, 2022	/s/ Kelly D. Deck
	Kelly D. Deck, C.P.A.
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Cover - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Feb. 21, 2022	Jun. 30, 2021
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--12-31
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Entity File Number	001-39452
Entity Registrant Name	INHIBRX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-4257312
Entity Address, Address Line One	11025 N. Torrey Pines Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	La Jolla
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92037
City Area Code	(858)
Local Phone Number	795-4220
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	INBX
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	true
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ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 764.3
Entity Common Stock, Shares Outstanding (in shares)		39,025,644
Documents Incorporated by Reference	The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information required in Part III of this Annual Report on Form 10-K is incorporated from the Registrant’s Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.
Amendment Flag	false
Entity Central Index Key	0001739614
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Audit Information	12 Months Ended
	Dec. 31, 2021
Audit Information [Abstract]
Auditor Firm ID	243
Auditor Name	BDO USA, LLP
Auditor Location	San Diego, California

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 131,301	$ 128,664
Accounts receivable	373	82
Receivables from related parties	505	533
Prepaid expenses and other current assets	6,933	2,893
Total current assets	139,112	132,172
Property and equipment, net	3,153	3,492
Right-of-use asset	6,338	7,831
Other non-current assets	1,847	245
Total assets	150,450	143,740
Current liabilities:
Accounts payable	9,125	13,458
Accrued expenses	9,621	13,357
Current portion of deferred revenue	2,034	3,081
Current portion of lease liability	1,674	1,503
Total current liabilities	22,454	31,399
Long-term debt, net of current portion and including final payment fee	70,470	29,244
Non-current portion of lease liability	5,033	6,707
Non-current portion of deferred revenue	110	737
Other non-current liabilities	0	180
Total liabilities	98,067	68,267
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.0001 par value, 15,000,000 shares authorized and no shares outstanding as of December 31, 2021 and 2020	0	0
Common stock, $0.0001 par value, 120,000,000 shares authorized as of December 31, 2021 and 2020; 38,991,307 and 37,712,390 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively	4	4
Additional paid-in-capital	279,526	220,848
Accumulated deficit	(227,147)	(145,379)
Total stockholders’ equity	52,383	75,473
Total liabilities, convertible preferred stock and stockholders’ equity	$ 150,450	$ 143,740

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	38,991,307	37,712,390
Common stock, shares outstanding (in shares)	38,991,307	37,712,390

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Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue:
Total revenue	$ 7,231	$ 12,888
Operating expenses:
Research and development	71,440	73,495
General and administrative	12,355	6,836
Total operating expenses	83,795	80,331
Loss from operations	(76,564)	(67,443)
Other income (expense):
Interest expense, net	(5,216)	(10,816)
Other income (expense), net	14	(2)
Change in fair value of warrant liabilities	0	(24)
Change in fair value of derivative liabilities	0	2,651
Total other expense	(5,202)	(8,191)
Loss before provision for income taxes	(81,766)	(75,634)
Provision for income taxes	2	3
Loss from equity method investment	0	487
Net loss	$ (81,768)	$ (76,124)
Net loss per share, basic (in dollars per share)	$ (2.15)	$ (3.01)
Net loss per share, diluted (in dollars per share)	$ (2.15)	$ (3.01)
Weighted-average shares of common stock outstanding, basic (in shares)	38,010,000	25,261,000
Weighted-average shares of common stock outstanding, diluted (in shares)	38,010,000	25,261,000
License fee revenue
Revenue:
Total revenue	$ 7,125	$ 12,808
Grant revenue
Revenue:
Total revenue	$ 106	$ 80

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Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit - USD ($) $ in Thousands	Total	IPO	Convertible Preferred Stock	2019 and 2020 Notes	2019 Convertible Note	2020 Convertible Note	COMMON STOCK	COMMON STOCK IPO	COMMON STOCK Convertible Preferred Stock	COMMON STOCK 2019 and 2020 Notes	Additional Paid-In Capital	Additional Paid-In Capital IPO	Additional Paid-In Capital Convertible Preferred Stock	Additional Paid-In Capital 2019 and 2020 Notes	Additional Paid-In Capital 2019 Convertible Note	Additional Paid-In Capital 2020 Convertible Note	Accumulated Deficit
Beginning balance, preferred stock (in shares) at Dec. 31, 2019	12,534,000
Beginning balance, preferred stock at Dec. 31, 2019	$ 59,507
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of shares in conversion of preferred shares (in shares)	(12,534,000)
Issuance of shares in conversion of preferred shares	$ (59,507)
Ending balance, preferred stock (in shares) at Dec. 31, 2020	0
Ending balance, preferred stock at Dec. 31, 2020	$ 0
Beginning balance (in shares) at Dec. 31, 2019							18,154,000
Beginning balance at Dec. 31, 2019	(93,569)						$ 2				$ (24,316)						$ (69,255)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	5,023										5,023
Beneficial conversion feature						$ 2,656										$ 2,656
Issuance of shares upon exercise of stock options (in shares)							2,000
Issuance of shares upon exercise of stock options	27										27
Issuance of shares in IPO (in shares)								8,050,000
Issuance of shares in IPO, net of issuance costs		$ 125,860						$ 1				$ 125,859
Issuance of shares in conversion of convertible securities (in shares)									7,211,000	4,295,000
Issuance of shares in conversion of convertible securities			$ 59,507	$ 59,393					$ 1				$ 59,506	$ 59,393
Reversal of unamortized BCF					$ (5,332)	$ (2,107)									$ (5,332)	$ (2,107)
Reclassification of warrant liabilities into equity	139										139
Net loss	$ (76,124)																(76,124)
Ending balance (in shares) at Dec. 31, 2020	37,712,390						37,712,000
Ending balance at Dec. 31, 2020	$ 75,473						$ 4				220,848						(145,379)
Ending balance, preferred stock (in shares) at Dec. 31, 2021	0
Ending balance, preferred stock at Dec. 31, 2021	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 15,048										15,048
Issuance of shares upon exercise of stock options (in shares)	358,000						358,000
Issuance of shares upon exercise of stock options	$ 3,956										3,956
Issuance of shares in IPO (in shares)							921,000
Issuance of shares in IPO, net of issuance costs	39,674										39,674
Net loss	$ (81,768)																(81,768)
Ending balance (in shares) at Dec. 31, 2021	38,991,307						38,991,000
Ending balance at Dec. 31, 2021	$ 52,383						$ 4				$ 279,526						$ (227,147)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net loss	$ (81,768)	$ (76,124)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,195	1,019
Accretion of debt discount and non-cash interest expense	1,234	10,189
Stock-based compensation expense	15,048	5,023
Non-cash lease expense	1,493	1,374
Gain on disposal of fixed assets	(9)	0
Change in fair value of derivative liabilities	0	(2,651)
Change in fair value of warrant liabilities	0	24
Loss from equity method investment	0	487
Changes in operating assets and liabilities:
Accounts receivable	(167)	117
Receivables from related parties	28	(294)
Prepaid expenses and other current assets	(4,040)	690
Other non-current assets	(1,602)	0
Accounts payable	(4,642)	10,426
Accrued expenses and other current liabilities	(3,736)	8,525
Operating lease liability	(1,503)	(1,345)
Deferred revenue, current portion	(1,047)	(5,345)
Deferred revenue, non-current portion	(627)	(263)
Other non-current liabilities	(180)	180
Net cash used in operating activities	(80,323)	(47,968)
Cash flows from investing activities
Purchase of fixed assets	(864)	(1,364)
Proceeds from the sale of fixed assets	55	0
Net cash used in investing activities	(809)	(1,364)
Cash flows from financing activities
Proceeds from the issuance of debt	39,992	29,938
Payment of fees associated with debt	0	(786)
Proceeds from exercise of stock options	3,956	27
Proceeds from the issuance of convertible notes	0	15,000
Repayment of principal on debt	0	(2,183)
Final payment on debt	0	(1,400)
Proceeds from the Paycheck Protection Program loan	0	1,875
Repayment of principal on the Paycheck Protection Program loan	0	(1,875)
Net cash provided by financing activities	83,769	166,456
Net increase in cash	2,637	117,124
Cash and cash equivalents at beginning of period	128,664	11,540
Cash and cash equivalents at end of period	131,301	128,664
Supplemental disclosure of cash flow information
Cash paid for interest	3,889	504
Cash paid for income taxes	2	3
Supplemental schedule of non-cash investing and financing activities
ATM offering costs included in accounts payable	271	0
ATM offering costs reimbursable in accounts receivable	124	0
Payable for purchase of fixed assets	38	83
Conversion of preferred stock to common stock	0	59,507
Conversion of the 2019 Note and the 2020 Notes to common stock	0	59,393
Debt discount arising from convertible note beneficial conversion features and reversal of beneficial conversion features	0	4,783
Operating lease liabilities arising from obtaining right-of-use assets	0	1,752
Derivative liabilities arising from the issuance of the 2019 Note and the 2020 Notes	0	735
Non-cash equity method investment	0	487
Reclassification of warrant liabilities to equity	0	139
Warrant liabilities issued to lender in conjunction with 2020 Loan Agreement	0	115
ATM Offering
Cash flows from financing activities
Proceeds from equity offering	40,203	0
Costs associated with offering	(382)	0
IPO
Cash flows from financing activities
Proceeds from equity offering	0	136,850
Costs associated with offering	$ 0	$ (10,990)

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Inhibrx, Inc., or the Company, or Inhibrx, is a clinical-stage biotechnology company focused on developing a broad pipeline of novel biologic therapeutic candidates. The Company combines target biology with protein engineering, technologies, and research and development to design therapeutic candidates. The Company’s current pipeline is focused on oncology and orphan diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, risks associated with preclinical studies, clinical trials and regulatory applications, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. The Company’s therapeutic candidates currently under development will require significant additional research and development efforts, including clinical and preclinical testing and marketing approval prior to commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Initial Public Offering

On August 21, 2020, the Company completed its initial public offering, or IPO, in which it sold 8,050,000 shares of common stock at an offering price of $17.00 per share. Net proceeds from the IPO were $125.9 million, net of underwriting discounts, commissions, and offering costs.

In addition, each of the following occurred in connection with the completion of the IPO:

•the conversion of the 2019 Note and the 2020 Notes (each as defined below) into 4,294,603 shares of the Company’s common stock;

•the conversion of all outstanding convertible preferred stock into 7,211,086 shares of the Company’s common stock;

•the adjustment of an outstanding warrant to purchase convertible preferred stock into a warrant to purchase 7,354 shares of the Company’s common stock; and

•the amendment and restatement of the Company’s certificate of incorporation, authorizing 120.0 million shares of common stock and 15.0 million shares of preferred stock.

Reverse Stock Split

On August 11, 2020 the Company effected a one-for-1.7382 reverse stock split of the Company’s common stock, or the Reverse Stock Split. The par value and the authorized shares of the common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock and the conversion prices of the convertible preferred stock and convertible notes have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an annual report on the Form 10-K.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation.

Liquidity

As of December 31, 2021, the Company had an accumulated deficit of $227.1 million and cash and cash equivalents of $131.3 million. From its inception and through December 31, 2021, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements.

As discussed in Note 5, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. As of December 31, 2021, 921,042 shares have been sold pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Impact of COVID-19 Pandemic

In response to the global outbreak of COVID-19 and the World Health Organization’s classification of the outbreak as a pandemic, the Company continues to take the necessary precautions to ensure the safety of its employees and to minimize interruptions to its operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of these financial statements. While the pandemic has not yet had a material effect on the Company’s financial results, it is uncertain as to the full magnitude of impact the pandemic will have on the Company’s financial condition, liquidity and future results of operations. Management is actively monitoring the risks to public health and the impact of overall global business activity on its financial condition, liquidity, operations, suppliers, industry, and workforce.

The U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. 

The CARES Act includes a provision for a Paycheck Protection Program, or PPP, administered by the U.S. Small Business Administration, or SBA, and further amended by the Paycheck Protection Program Flexibility Act of 2020,

or PPP Flexibility Act, which was enacted on June 5, 2020. The Company was approved for a loan pursuant to the PPP, or the PPP Loan, in the amount of $1.9 million and received the funds on May 11, 2020. On October 2, 2020, the Company repaid the loan in full plus all interest accrued during the period outstanding.

The CARES Act also permits employers to defer the payment of the employer share of social security taxes due for the period beginning March 27, 2020 and ending December 31, 2020. Of the amounts deferred, 50% was required to be paid by December 31, 2021 and the remaining 50% is required to be paid by December 31, 2022. The Company began deferring payment of the employer share of social security taxes in April 2020 and deferred a total of $0.4 million of such taxes during the period. The Company paid $0.3 million of deferred taxes during December 2021. As of December 31, 2021, the Company has a remaining deferred payment of $0.1 million of such taxes which are classified as accrued expenses in the Company’s consolidated balance sheets.

The Company will continue to examine and evaluate any impacts the CARES Act and associated subsequent legislation may have on its business and taxes.    

Use of Estimates

The preparation of these consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to evaluation of embedded derivative instruments and beneficial conversion features, or BCFs, within its previously issued and outstanding convertible notes, whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of accounts receivable, accounts payable, accrued expense, its long-term debt, convertible notes, warrants, and derivative instruments as applicable. The carrying amounts of financial instruments such as accounts receivable, accounts payable, accrued expense, and convertible notes approximate their related fair values due to the short-term nature of these instruments. The carrying value of the Company’s debt approximates fair value due to its interest being reflective of current market rates for debt with similar terms and conditions. The Company’s derivative instruments and warrants are carried at fair value based on unobservable market inputs.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash held in financial institutions including readily available checking and money market accounts.

Concentrations of Credit Risk

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

The Company continually evaluates its accounts receivable for all outstanding third-party balances to determine the potential exposure to a concentration of credit risk. The Company’s major third-party contracting parties, some of which account for significant balances in both accounts receivable and revenue, are generally large, credit-worthy biotechnology companies and government bodies. The Company assesses the collectability of accounts receivable through a review of its current aging, as well as an analysis of its historical collection rate, general economic conditions, and credit status of these third parties. As of December 31, 2021 and 2020, all outstanding accounts receivable were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

The Company currently depends on third-party suppliers for key materials and services used in its research and development, as well as manufacturing processes, and is subject to certain risks related to the loss of these third-party suppliers or their inability to supply the Company with adequate materials and services. In August 2018, the Company entered into a strategic alliance with WuXi Biologics (Hong Kong), Limited, or WuXi Biologics, pursuant to which the Company agreed, for three years and subject to certain conditions, to exclusively use WuXi Biologics to manufacture its therapeutic candidates on a project-by-project basis. In August 2021, the exclusivity provisions of the Wuxi Agreement expired, and the Company may use manufacturers other than Wuxi to manufacture its therapeutic candidates. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts, including WuXi Biologics, and is dependent on these third parties for the production of its therapeutic candidates in accordance with relevant regulations such as current Good Manufacturing Practices, or cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

Dividends

As of December 31, 2021, the Company has never declared or paid any dividends on its common stock.

Additionally, the Amended 2020 Loan Agreement limits, among other things, the Company’s ability to pay dividends and make certain other payments. Any future determination to pay dividends on the Company’s common stock will be at the discretion of the Company’s board of directors and will depend upon, among other factors, the results of operations, financial condition, capital requirements, contract restrictions, business prospects and other factors the Company’s board of directors may deem relevant.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. The Company estimates useful lives as follows:

•machinery and equipment: three to five years;

•furniture and fixtures: three to five years; and

•computer software: four to five years.

Amortization of leasehold improvements is provided on a straight-line basis over the shorter of their estimated useful lives or the lease term. The costs of additions and betterments are capitalized, and repairs and maintenance costs are expensed in the periods incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. If such assets are considered impaired, the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, fair value being determined based upon future cash flows or appraised values, depending on the nature of the asset. The Company recognized no impairment losses during any of the periods presented within its consolidated financial statements.

Leases

The Company has two existing leases for its corporate headquarters in La Jolla, California. Its first lease commenced in June 2018. In May 2019, the Company signed an amendment to its lease agreement to expand the Company’s facilities, which commenced in January 2020 and is accounted for as a separate lease. The Company’s two existing leases are classified as operating leases.

For the long-term operating lease of its corporate headquarters, the Company recognized a right-of-use asset and lease liability on its consolidated balance sheet. The lease liability is determined as the present value of future lease payments using an estimated incremental borrowing rate that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise. Agreements are reviewed at

inception to determine if they contain a lease. Leases are reviewed and classified as operating or financing leases at commencement.

The Company has elected to exclude from its consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases) and has elected not to separate lease components and non-lease components for its long-term operating leases.

Rent expense for the operating leases are recognized on a straight-line basis over the lease term and is included in operating expense in the consolidated statements of operations for all periods presented.

Equity Method Investment

The Company uses the equity method of accounting for equity investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. As discussed in Note 7, the Company received an equity investment in the form of a 10% equity interest as consideration in a series of agreements with Phylaxis (as defined below), which is accounted for as an equity method investment. The Company's proportionate share of the net income or loss of these companies is included as loss in equity method investment in the consolidated statement of operations. Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, legal form of the investee (e.g. limited liability corporation), participation in policy-making decisions, and material purchase and sale transactions. During the third quarter of 2020, the Company’s equity method investment was written down to zero as a result of the allocation of the Company’s share of losses of the investee. As of December 31, 2021 and 2020, the equity method investment remains at zero.

Derivative Liabilities

As discussed in Note 4, the convertible promissory note, or the 2019 Note, issued in May 2019 to DRAGSA 50 LLC, an entity affiliated with Viking Global Investors LP, or Viking, and the convertible promissory notes, or the 2020 Notes, issued in April 2020 to Viking and certain other investors contained embedded features that provided multiple settlement alternatives. Certain of these settlement features provided the noteholders with a right to a fixed number of the Company’s shares upon conversion of the note. Other settlement features provided the noteholders the right or the obligation to receive cash or a variable number of shares upon the completion of a capital raising transaction, change of control, qualified IPO (as defined in the 2019 Note and the 2020 Notes), or default of the Company. The Company evaluated each settlement alternative within the 2019 Note and the 2020 Notes under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 815-15, Embedded Derivatives and ASC Topic 815-40, Contracts in Entity’s Own Equity and determined certain of the settlement features would be accounted for as redemption features meeting the requirements for separate accounting as a single, compound derivative instrument.

This single, compound derivative instrument was accounted for as a liability at its estimated fair value as of the date of issuance, and then subsequently remeasured to fair value as of each balance sheet date, with the related remeasurement adjustment being recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. During August 2020, the Company consummated its IPO, resulting in the conversion of the 2019 Note and the 2020 Notes into shares of the Company’s common stock. As of December 31, 2021 and 2020, the derivative liabilities no longer exist.

Warrant Liabilities

As discussed in Note 3, in conjunction with the 2020 Loan Agreement with Oxford, the Company issued warrants for the purchase of: 1) its preferred stock if the Company remained privately-held or 2) common stock upon the successful completion of an IPO prior to December 31, 2020. Upon the issuance of the warrants in July 2020, pursuant to ASC Topic 480, the warrants were accounted for as liabilities and measured at their estimated fair value as of the date of issuance, based on the potential conversion into preferred stock. During August 2020, upon consummation of the Company’s IPO, the warrants were deemed to be issued for the purchase of common stock and

were no longer accounted for as liabilities. The change in fair value was recognized as a component of change in fair value of warrant liabilities in the consolidated statements of operations during the year ended December 31, 2020.

Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The 2019 Note and the 2020 Notes contained embedded derivative liabilities (see Note 4). The 2020 Loan Agreement contained warrant liabilities (see Note 3). Prior to the completion of the IPO in August 2020, these were classified within Level 3 of the hierarchy, since they were valued by using inputs that were unobservable in the market. Upon the consummation of the IPO in August 2020, the derivative liabilities and warrant liabilities no longer existed. As of December 31, 2021 and 2020, the Company had no financial liabilities measured at fair value.

Prior to the completion of the IPO in August 2020, the Company’s liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) included the derivative liabilities related to the 2019 Note and the 2020 Notes and the warrants issued with the 2020 Loan Agreement. The following table provides a reconciliation of financial instruments measured at fair value using Level 3 unobservable inputs for the year ended December 31, 2020 (in thousands):

Balance as of December 31, 2019	$	1,916
Establishment of derivative liability on the 2020 Notes	735
Establishment of warrant liabilities on the 2020 Loan Agreement	115
Change in fair value of derivative liabilities on the 2019 and 2020 Notes	(2,651)
Change in fair value of warrant liabilities	24
Reclassification of warrant liabilities into equity	(139)
Balance as of December 31, 2020	$	—

The fair value of the Company’s derivative liabilities categorized in Level 3 of the fair value hierarchy during the year ended December 31, 2020 was determined, with the assistance of an independent third-party valuation specialist, using a lattice model. The valuation utilized unobservable inputs, including the discount rate, management’s assessment of the probability of various underlying events triggering the conversion of the Company’s 2019 Note and the 2020 Notes (as discussed in Note 4), such as an IPO, financing, or extraordinary event, and the current valuation of the Company determined with the assistance of an independent third-party valuation specialist. The warrant liabilities were valued using a Black-Scholes model upon issuance. As of December 31, 2020, the derivative liabilities no longer exist as a result of the conversion of the 2019 Note and the 2020 Notes upon the IPO. Additionally, as of December 31, 2020 the warrant liabilities have been reclassified into equity after the Oxford warrants became exercisable for common stock subsequent to the Company’s IPO.

There were no financial instruments measured at fair value during the year ended December 31, 2021.

Deferred Financing Costs and Other Debt-Related Costs

Deferred financing costs are capitalized, recorded as an offset to the Company’s debt balances and amortized as interest expense over the term of the associated debt instrument using the effective interest method, pursuant to ASC Topic 835-30, Imputation of Interest. If the maturity of the debt is accelerated as a result of default or early debt repayment, the amortization would then be accelerated. Amounts paid related to debt financing activities are presented on the consolidated balance sheet as a direct deduction from the debt liability.

Deferred Offering Costs

The Company capitalizes costs that are directly associated with equity financings until such financings are consummated at which time such costs are recorded against the gross proceeds of the offering.

Legal, accounting, and filing fees related directly to the Company’s IPO were capitalized as deferred offering costs to be offset against proceeds upon the consummation of the IPO within stockholders’ equity (deficit). In August 2020, the Company completed its IPO and offset $11.0 million of IPO costs against the proceeds. No deferred offering costs were capitalized on the Company’s consolidated balance sheets as of December 31, 2020.

Legal, accounting, and filing fees related directly to the Company’s Shelf Registration are capitalized as deferred offering costs. Deferred offering costs associated with the Shelf Registration are reclassified to additional paid-in capital when the Company completes offerings under the Shelf Registration. In November 2021, the Company completed an offering under the Shelf Registration and offset $1.7 million of offering costs against the proceeds.

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the consolidated balance sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements, or ASC Topic 808. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone

payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future are not material rights as they are contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Grant Revenue

The Company has been awarded grants from the Congressionally Directed Medical Research Program, or CDMRP, funded through the DoD. With respect to revenue derived from reimbursement of direct, out-of-pocket expenses for research and development costs associated with these grants, where the Company acts as a principal with discretion to choose suppliers, bears credit risk, and performs part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations.

Since there is no transfer of control of goods or services to the granting entities, the granting entities do not meet the definition of a “customer” as defined by ASC Topic 606 and therefore, these government grants and private not-for-profit institution grants are not within the scope of ASC Topic 606.

Revenue from these grants are based upon internal costs incurred that are specifically covered by the grant, plus an additional rate that provides funding for overhead expenses. Revenue is recognized as the Company incurs expenses related to the grant which is consistent with the concept of transfer of control of a service over time under ASC Topic 606.

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the

differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.

The utilization of unused federal and state net operating losses, or NOLs, and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code, as amended, or IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two class method required for participating securities as the convertible preferred stock is considered a participating security. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Accordingly, for the years ended December 31, 2021 and 2020, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF DECEMBER 31,
	2021	2020
Outstanding stock options	4,064	2,525
Warrant to purchase common stock	7	7
	4,071	2,532

Fair Value of Stock-Based Awards

The Company recognizes compensation costs related to stock options based on the estimated fair value of the awards on the date of grant. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model. The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes forfeitures as they occur.

Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

Segment Information

The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise stated, the Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which addresses the accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; and (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. The provisions of this guidance are to be applied prospectively upon their effective date. ASU 2020-01 was effective for fiscal years beginning after December 15, 2020, and interim periods within those years. Early adoption was permitted, but required simultaneous adoption of all provisions of this guidance. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves consistent application and simplification of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 was effective for fiscal years beginning after December 15, 2020. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options, or Subtopic 470-20 and Derivatives and Hedging—Contracts in Entity’s Own Equity, or Subtopic 815-40: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Specifically, ASU 2020-06 simplifies accounting for the issuance of convertible instruments by removing major separation models required under current GAAP. In addition, the ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share, or EPS, calculation in certain areas. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, beginning in fiscal years which begin after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 under a modified retrospective approach as of January 1, 2021. As a result of the adoption, there was no impact on retained earnings or other components of equity or to earnings per share in the Company’s consolidated financial statements.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 362), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods therein, and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2021-04 may have on its consolidated financial statements and related disclosures.

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OTHER FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

OTHER FINANCIAL INFORMATION

OTHER FINANCIAL INFORMATION

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Outside research and development services	$	6,343	$	2,204
Other	590		689
Prepaid expense and other current assets	$	6,933	$	2,893

Property and Equipment, Net

Property and equipment, net were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Machinery and equipment	$	6,286	$	5,652
Leasehold improvements	441		441
Furniture and fixtures	514		507
Computer software	42		—
Construction in process	281		257
Total property and equipment	7,564		6,857
Less: accumulated depreciation and amortization	(4,411)		(3,365)
Property and equipment, net	$	3,153	$	3,492

Depreciation and amortization expense totaled $1.2 million and $1.0 million for the years ended December 31, 2021 and 2020, respectively, and consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	1,003	$	836
General and administrative	192		183
Total depreciation and amortization expense	$	1,195	$	1,019

Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Clinical research and development	$	4,496	$	970
Other outside research and development	2,893		10,559
Compensation expense	1,322		1,165
Professional fees	261		282
Other	649		381
Accrued expenses	$	9,621	$	13,357

The amount accrued for research and development expense relates primarily to the Company’s usage of third-party CROs and CDMOs for clinical and development efforts as its therapeutic candidates progress. See Note 1 for further discussion of the components of research and development.

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DEBT

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

DEBT

DEBT

2020 Loan Agreement

On July 15, 2020, the Company entered into a loan and security agreement, or the 2020 Loan Agreement, with Oxford Finance LLC, or Oxford, pursuant to which it received $10.0 million in gross proceeds, net of $0.1 million of debt issuance costs.

On November 12, 2020, the Company entered into an amendment to the 2020 Loan Agreement, or the November 2020 Amendment, and received $20.0 million in additional gross proceeds, net of $0.02 million of debt issuance costs and $0.7 million of a one-time first amendment fee. The November 2020 Amendment provided for two additional tranches of term loans, in addition to the first $10.0 million tranche, or Term A, for an aggregate principal amount of up to $50.0 million, as follows: (a) the second tranche in an aggregate principal amount of $20.0 million, funded upon the closing of the November 2020 Amendment, or Term B, and (b) the third tranche in an aggregate principal amount of $20.0 million to fund on or before September 30, 2021, subject to the initiation of a potentially registration-enabling trial for the Company’s therapeutic candidate, INBRX-109, in unresectable or metastatic conventional chondrosarcoma, pursuant to the terms of the November 2020 Amendment, or Term C. The terms of Term A under the 2020 Loan Agreement were modified to align with Term B pursuant to the November 2020 Amendment.

On June 18, 2021, the Company entered into an additional amendment to the 2020 Loan Agreement, or the June 2021 Amendment (collectively with the November 2020 Amendment, the Amended 2020 Loan Agreement). Pursuant to the June 2021 Amendment, the principal amount of the Term C Loan was increased from $20.0 million to $40.0 million. All terms of the Term C Loan align with the existing terms of the Term A and Term B Loans. Upon execution of the June 2021 Amendment and based on the initiation of a potentially registration-enabling trial in unresectable or metastatic conventional chondrosarcoma, the Company drew the Term C Loan and received $40.0 million in gross proceeds, net of $0.01 million of debt issuance costs.

As of December 31, 2021 the Company has $70.0 million in gross principal outstanding in term loans under the Amended 2020 Loan Agreement. The outstanding term loans will mature on November 1, 2025, or the Amended Maturity Date, and bear interest at a floating per annum rate equal to the greater of (1) 7.96% and (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 7.80%. The repayment schedule provides for interest-only payments until January 1, 2025. The interest-only period is followed by 11 months of equal payments of principal and interest. Upon the Amended Maturity Date, a final payment of 9.0% of the original principal amount will be due to Oxford. This final payment of $6.3 million is being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method. The Company has the option to prepay the outstanding balance of the term loans in full prior to the Amended Maturity Date, subject to a prepayment fee ranging from 1.0% to 3.0%, depending upon the timing of the prepayment. All other terms of the original 2020 Loan Agreement remain outstanding.

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following (in thousands).

	AS OF DECEMBER 31,
	2021		2020
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		—
Less: Debt discount	(5,830)		(3,456)
Total debt	70,470		29,244
Less: Current portion, including debt discount	—		—
Long-term debt, including debt discount	$	70,470	$	29,244

Through 2024, the Company is only required to make interest payments on the outstanding principal balance, with future principal payments and final fee payments beginning in 2025, as follows (in thousands):

	AS OF DECEMBER 31, 2021
	2021
2025	$	76,300
Total future minimum payments	76,300
Less: unamortized debt discount	(5,830)
Total debt	$	70,470

In November 2020 and June 2021, the Company evaluated the amendments and determined they should be treated as modifications of the original 2020 Loan Agreement since the terms and resulting cash flow were not substantially changed in either the November 2020 Amendment or the June 2021 Amendment. The Company will continue to amortize the existing debt discounts prior to modification through the Amended Maturity Date.

The Company’s obligations under the Amended 2020 Loan Agreement are secured by a first priority security interest of substantially all of the Company’s assets, other than its intellectual property. The Amended 2020 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans. Additionally, following the June 2021 Amendment, the Amended 2020 Loan Agreement requires a minimum cash balance of $20.0 million to be maintained in a collateral account. As of December 31, 2021, the Company is in compliance with all covenants under the Amended 2020 Loan Agreement and has not received any notification or indication from Oxford of an intent to declare the loan due prior to maturity.

Concurrently with the debt issuance in July 2020, the Company issued to Oxford warrants to purchase shares of the Company’s capital stock equal to 1.25% of the funded amount, or $125,000. Upon issuance, the warrants were

exercisable for preferred stock and were classified as liabilities pursuant to Topic ASC 480 at their fair value of $0.12 million. Upon the consummation of the Company’s IPO in August 2020, the Company remeasured the warrants and determined a fair value of approximately $0.14 million. The change in fair value was recorded as a change in fair value of warrant liabilities within other income in the Company’s consolidated statements of operations during the year ended December 31, 2020. As of December 31, 2021 and 2020, the warrants are equity-classified and are exercisable for 7,354 shares of common stock of the Company at $17.00 per share.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment. Interest expense was approximately $5.4 million and $0.9 million for the years ended December 31, 2021 and 2020, respectively, as related to the Amended 2020 Loan Agreement. Interest expense was approximately $44,000 for the year ended December 31, 2020 as related to the Company’s previous loan and security agreement, as amended, or the 2015 Loan Agreement, with Oxford. The Company recorded no interest expense for the year ended December 31, 2021 related to the 2015 Loan Agreement since it was paid in full in March 2020.

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CONVERTIBLE PROMISSORY NOTE

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

CONVERTIBLE PROMISSORY NOTE

CONVERTIBLE PROMISSORY NOTES

In May 2019, the Company issued the 2019 Note in the aggregate principal amount of $40.0 million to Viking in a private placement transaction. The 2019 Note began to accrue interest in February 2020 at a rate of 1.5% per month. In April 2020, the Company issued the 2020 Notes in the aggregate principal amount of $15.0 million to Viking and certain other investors in a private placement transaction. Upon issuance, the 2020 Notes accrued interest at a rate of 1.0% per month.

Conversion Upon IPO

On August 21, 2020, the Company completed its IPO. The aggregate total balance of the 2019 Note, or $43.7 million, converted at the fixed price of $14.35 per share, resulting in the issuance of 3,046,467 shares of common stock to the holder. The aggregate total balance of the 2020 Notes, or $15.7 million, converted at a fixed price of $12.56 per share, resulting in the issuance of 1,248,136 shares of common stock to the holders.

The conversion of the 2019 Note and the 2020 Notes were evaluated for contingent BCFs under ASC Topic 470-20, Debt With Conversion and Other Options. See discussion of debt discount below for evaluation upon conversion.

Derivative Liabilities

The terms of the 2019 Note and the 2020 Notes contained alternative conversion options to the IPO upon the consummation of certain events, each of which had its own conversion prices and terms. The Company determined certain settlement features qualified as conversion features not meeting the requirements for separate accounting as embedded derivatives, while others qualified as redemption features meeting the requirements for separate accounting which were accounted for as derivative instruments.

Upon issuance of the 2019 Note and the 2020 Notes, the Company recorded derivative liabilities with corresponding debt discounts on the consolidated balance sheets at the estimated fair value of the bifurcated compound liabilities. The Company remeasured the fair value at each reporting period. Changes in the probability of each embedded redemption feature drove changes in the fair value of the derivative liabilities and had a corresponding impact on the Company’s net loss. During the second quarter of 2020, the fair value of the derivatives were determined to be zero based upon the expected conversion of the notes via an embedded conversion feature which did not meet the definition of a derivative. Upon conversion of the 2019 Note and the 2020 Notes in August 2020 upon completion of the Company’s IPO, the derivative liabilities were extinguished. No additional expense was recorded at extinguishment since the derivative liabilities had already been assessed to have zero value. During the year ended December 31, 2020, the Company recorded other income of $2.7 million related to changes in fair value of derivative liabilities in the consolidated statements of operations.

Debt Discount

Upon issuance of the 2019 Note and the 2020 Notes, the Company recorded debt discounts related to BCFs, as well as derivative liabilities and debt issuance costs. Prior to conversion, the debt discounts were amortized over the life

of the notes. Amortization of the debt discount from inception of the 2019 Note until conversion of the 2019 Note and the 2020 Notes upon IPO was $8.7 million. At the time of conversion, the 2019 Note and the 2020 Notes had unamortized discounts of $6.9 million and $2.7 million, respectively.

Upon conversion of the 2019 Note and the 2020 Notes, the Company remeasured the intrinsic value of the BCFs which resulted in a reversal of the remaining unamortized discounts associated with the BCFs, resulting in a $7.4 million impact to additional paid-in-capital. Additionally, the Company accelerated the unamortized debt discounts related to the debt issuance costs and the derivative liabilities, resulting in a $2.2 million charge to interest expense during the third quarter of 2020.

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STOCKHOLDERS’ EQUITY (DEFICIT)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

STOCKHOLDERS’ EQUITY (DEFICIT)

STOCKHOLDERS’ EQUITY (DEFICIT)

Amended and Restated Certificate of Incorporation

On August 21, 2020 upon completion of the IPO, the Company’s certificate of incorporation was amended and restated to authorize 120,000,000 shares of common stock and 15,000,000 shares of preferred stock, each with a par value of $0.0001 per share.

Convertible Preferred Stock

In connection with the completion of the Company’s IPO in August 2020, all of the outstanding shares of convertible preferred stock were converted into 7,211,086 shares of the Company’s common stock. Prior to its conversion to common stock, the convertible preferred stock was classified as temporary, or mezzanine, equity on the accompanying consolidated balance sheets since the shares contained certain redemption features that were not solely within the control of the Company. The Company had not previously accreted the convertible preferred stock to its redemption value since the shares were not currently redeemable and redemption was not deemed to be probable.

No convertible preferred stock was authorized or issued as of December 31, 2021 or December 31, 2020.

Common Stock

In September 2021, the Company entered into the Sales Agreement with the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. Pursuant to the Sales Agreement, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. As of December 31, 2021, the Company has sold 921,042 shares under the ATM Offering for net proceeds of $40.2 million, after deducting commissions of $1.2 million. In connection with the ATM Offering, the Company incurred an additional $0.5 million of expenses which were offset against the proceeds of the offering.

Common Stock Warrants

As discussed in Note 3, the Company issued warrants to Oxford concurrently with the 2020 Loan Agreement. Upon the consummation of the Company’s IPO in August 2020, the warrants are exercisable for 7,354 shares of common stock of the Company at $17.00 per share. As of December 31, 2021, the warrants are equity-classified and reflected in additional paid-in-capital at $0.14 million. The fair value of the warrants was determined using the Black-Scholes model on the date of reclassification. No subsequent remeasurement is required for equity-classified warrants.

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EQUITY COMPENSATION PLANS

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLANS

Stock Incentive Plan

The Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards. As of December 31, 2021, an aggregate of 4.5 million shares of common stock were reserved for issuance under the 2017 Plan, of which 0.1 million were available.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant. The Company grants options with an exercise price equal to

the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the year ended December 31, 2021 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2020	2,525	$	11.80
Granted	2,307	$	32.00
Forfeited	(410)	$	23.09
Exercised	(358)	$	11.05
Outstanding as of December 31, 2021	4,064	$	22.19	8.3	$	87,303
Vested and exercisable as of December 31, 2021	1,253	$	11.37	7.1	$	40,468

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and 2020 was $7.5 million and $19,000, respectively. Aggregate intrinsic value of stock options exercised and outstanding is calculated using the fair value of common stock on the date of exercise and as of December 31, 2021, respectively.

Stock-Based Compensation Expense

Stock options are valued using the Black-Scholes Merton option pricing model on the date of grant. This option pricing model involves a number of estimates, including the expected lives of the stock options, the Company’s anticipated stock volatility, and interest rates. Stock-based compensation expense is recognized using the straight-line method over the vesting period. The Company recognizes forfeitures as they occur.

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the years ended December 31, 2021 and 2020 were as follows. 

	YEAR ENDED DECEMBER 31,
	2021			2020
Risk-free interest rate	0.71		%	0.42		%
Expected volatility	93.49		%	97.72		%
Expected dividend yield	—		%	—		%
Expected term	6.08			6.08
Weighted average fair value	$	24.20		$	10.82

The Company determines the assumptions used in the option pricing model in the following manner:

Risk-Free Interest Rate—For the determination of the risk-free interest rates, the Company utilizes the U.S. Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption.

Expected Volatility—Due to the Company’s limited historical stock price volatility data, the Company based its estimate of expected volatility on the estimated and expected volatilities of a guideline group of publicly traded companies. For these analyses, the Company selected companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the

selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected Dividend—The expected dividend yield is assumed to be zero since the Company has never paid dividends and does not have current plans to pay any dividends on its common stock.

Expected Term—The Company estimates the expected term of its stock options granted to employees and non-employee directors using the simplified method, whereby, the expected term equals the average of the vesting term and the original contractual term of the option. The Company utilizes this method since it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

Prior to the Company’s IPO, given the absence of a public trading market for the Company’s common stock, its board of directors exercised their judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of the Company’s common stock underlying the stock options, such as: contemporaneous valuations performed by independent third-party specialists, its stage of development, including the status of its research and development efforts of its therapeutic candidates and the material risks related to its business and industry, its results of operations and financial condition, including its levels of capital resources, the prices at which its sold shares of its convertible preferred stock, the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock, the conditions in the biotechnology industry and the economy in general, the stock price performance and volatility of comparable life sciences public companies, as well as recently completed mergers and acquisitions of peer companies, the likelihood of achieving a liquidity event for the holders of its common stock or convertible preferred stock, such as an IPO or a sale of the Company given prevailing market conditions, trends and developments in its industry, external market conditions affecting the life sciences and biotechnology sectors, and the lack of liquidity of its common stock, among other factors.

Subsequent to the Company’s IPO, the fair value of the Company’s common stock is determined based on its closing market price on the date of the grant. The Company’s board of directors intended all options granted to be exercisable at a price per share not less than the per share fair value of its common stock underlying those options on the grant date.

Stock-based compensation expense for stock options consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	11,830	$	4,300
General and administrative	3,218		723
Total stock-based compensation expense	$	15,048	$	5,023

As of December 31, 2021, the Company had $47.0 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.04 years

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LICENSE AND GRANT REVENUES

12 Months Ended

Dec. 31, 2021

Revenue Recognition and Deferred Revenue [Abstract]

LICENSE AND GRANT REVENUES

LICENSE AND GRANT REVENUES

The following table summarizes the total revenue recorded in the Company’s consolidated statements of operations (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
License fee revenue from affiliates
Elpiscience Biopharmaceuticals, Inc.	$	—	$	2,000
Total license fee revenue from affiliates	—		2,000
License fee revenue from non-affiliates
2seventy bio, Inc.	4,200		400
Phylaxis BioScience, LLC	2,392		1,993
Chiesi Farmaceutici S.p.A.	533		7,365
Other license revenues from non-affiliates	—		1,050
Total license fee revenue from non-affiliates	7,125		10,808
Grant revenue
Congressionally Directed Medical Research Program	106		80
Total grant revenue	106		80
Total revenue	$	7,231	$	12,888

License and Collaboration Agreements

Elpiscience

In April 2018, the Company entered into a separate License Agreement, or the OX40 License Agreement, with Elpiscience Biopharmaceuticals, Inc., or Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. This license provides Elpiscience with the right to further advance the therapeutic candidate through clinical trials, as well as manufacture and commercialize it. It also requires the Company to provide Elpiscience with know-how and materials specific to INBRX-106, including process development and manufacturing data and information necessary to develop INBRX-106. In the OX40 License Agreement, the Company also agreed to negotiate an agreement to supply Elpiscience with INBRX-106 for its development in Mainland China, Hong Kong Macau and Taiwan. The Company is eligible to receive certain developmental and commercial milestones of up to an aggregate of $100.0 million, as well as percentage tiered royalties on future product sales with rates in the high single-digits. Due to the uncertainty in the achievement of the developmental and commercial milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. This will be re-assessed at each reporting period.

In September 2020, the Company achieved a milestone under the contract for $2.0 million, which was received during September 2020. The Company recognized revenue of $2.0 million during the year ended December 31, 2020. No revenue was recognized related to this agreement during the year ended December 31, 2021.

2seventy bio, Inc.

2018 License Agreement

On December 20, 2018, the Company entered into a License Agreement with bluebird bio, Inc., or bluebird, whereby the Company granted bluebird the exclusive, worldwide rights to develop, manufacture, and commercialize certain cell therapy products containing binders. In November 2021, bluebird assigned the agreement, or the 2018 2seventy Agreement, to its affiliate, 2seventy bio, Inc., or 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under this agreement, the Company is entitled to receive specified development milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on

future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

In July 2021, a milestone event under the 2018 2seventy Agreement was achieved and the Company recognized $2.0 million of revenue at that point in time. The Company received the associated $2.0 million payment in August 2021. During the year ended December 31, 2021, the Company recognized a total of $2.0 million in revenue related to this agreement. During the year ended December 31, 2020, the Company recognized no revenue related to this agreement.

2020 Option and License Agreement

In June 2020, the Company entered into an Option and License Agreement with bluebird, pursuant to which the Company granted to bluebird exclusive worldwide development licenses to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs. The Company retains all rights to the specific sdAbs outside of the cell therapy field. This agreement, or the 2020 2seventy Agreement, was also assigned to 2seventy in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy.

In June 2020, the Company received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and is entitled to an upfront option fee for each additional program, on a program-by-program basis. The Company also granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option. In connection with each program for which 2seventy exercises its option, 2seventy will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions for each option 2seventy chooses to exercise. The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

As of the effective date of the 2020 2seventy Agreement, the Company identified one performance obligation, which was the transfer of the exclusive development license to bluebird for the two initial programs. The Company determined that the option granted for an exclusive license in the future was not a material right. For the eight programs not identified upon execution of the contract, the Company evaluated the customer option for additional purchases and determined that those options for additional programs did not constitute material rights nor variable consideration. As additional programs are identified, the Company will re-assess its performance obligations and transaction price accordingly.

The Company determined the total transaction price of the 2020 2seventy Agreement at execution was $0.4 million for the transfer of the two exclusive development licenses. The Company recognized $0.4 million of revenue related to this agreement at the point in time in which the exclusive development licenses were transferred to bluebird, which occurred upon execution of the agreement in June 2020.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. The Company recognized the $0.1 million of revenue related to this extension in May 2021, the point in time in which the extension was granted.

In October 2021, pursuant to the option exercise terms in the 2020 2seventy Agreement, the Company received a $2.1 million option exercise fee for one of the initial programs and transferred an exclusive license for the program

and recognized the $2.1 million of revenue related to this option exercise at the point in time in which the exclusive license was transferred.

During the years ended December 31, 2021 and 2020, the Company recognized $2.2 million and $0.4 million of revenue related to this agreement, respectively.

Phylaxis Agreements

In July 2020, the Company entered into a joint venture with an entity affiliated with ArrowMark Partners, Phylaxis BioScience, LLC, or Phylaxis. In connection with the joint venture, the Company entered into the following agreements: Contribution Agreement, License Agreement, Limited Liability Company Agreement, and Master Services Agreement, or collectively the Phylaxis Agreements, pursuant to which the Company licensed certain intellectual property and know-how to Phylaxis and agreed to provide services to develop certain compounds. Upon closing, the Company received a $2.5 million nonrefundable, upfront payment from Phylaxis under the Master Services Agreement, or the MSA. The Company has also received an additional $2.5 million, which was payable within 180 days from closing under the MSA, in two payments of $1.25 million each, received in October 2020 and January 2021. Upon closing, the Company received a 10% equity interest in Phylaxis as consideration for the contribution of the license of the Company’s intellectual property and know-how and is entitled to receive an additional 5% based on the achievement of certain milestones. Under the License Agreement, the Company is also entitled to specified development and commercialization milestone payments of up to an aggregate of $225.0 million and $175.0 million, respectively. The Company is also entitled to share in a percentage of the profits of Phylaxis under the Limited Liability Company Agreement.

In order to determine the fair value of the equity interest in Phylaxis, the Company engaged a third-party valuation specialist. The valuation report utilized a market approach to establish the total equity value of Phylaxis using inputs not observable in the market, including the discount rate. The fair value of the equity interest was $0.5 million, which has been accounted for under the equity method. The fair value of the equity interest upon the execution of the agreements has been included in the transaction price, along with the $5.0 million of payments due pursuant to the MSA.

The Company identified the transfer of the exclusive licenses for, and performance of, development services to modify the first and second compounds as one performance obligation and allocated the transaction price evenly between the two compounds. Revenue related to the performance obligation will be recognized over time as services are performed, based on the Company’s progress to satisfy the performance obligation.

During the years ended December 31, 2021 and 2020, the Company recognized $2.4 million and $2.0 million of revenue related to this performance obligation, respectively. As of December 31, 2021, the Company has $1.1 million of deferred revenue related to this agreement, all of which is classified as current. As of December 31, 2020, the Company had $1.6 million and $0.6 million of current and non-current deferred revenue related to this agreement, respectively.

Chiesi

In May 2019, the Company entered into an Option Agreement, as amended by the First Amendment to Option Agreement, dated August 19, 2019, or the Chiesi Option Agreement, with Chiesi Farmaceutici S.p.A., or Chiesi, pursuant to which the Company granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Under the terms of the Chiesi Option Agreement, the Company received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. If Chiesi chooses to exercise its option under the Chiesi Option Agreement, then Chiesi must pay the Company a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, the Company may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

The Company has identified one performance obligation as of the effective date of the Chiesi Option Agreement, which is to perform research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by the Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the

Company’s delivery to Chiesi of the finalized minutes from the definitive U.S. Food and Drug Administration, or FDA, scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel European Medicines Agency health technology assessment, or EMA-HTA, scientific advice meeting conducted following completion of such Phase I Clinical Trial. The Company has determined that the option to grant a license in the future is not a material right.

The $10.0 million upfront payment has been allocated to the single performance obligation. Revenue is recognized over time as services are performed during the option period, based on the Company’s effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period. During the years ended December 31, 2021 and 2020, the Company recognized $0.5 million and $7.4 million in revenue related to this agreement, respectively. As of December 31, 2021, the Company has $0.9 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively. As of December 31, 2020, the Company had $1.4 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively.

Celgene

In June 2012, the Company entered into a Development and Option Agreement with Celgene whereby the Company granted Celgene an option to exclusively license certain intellectual property rights relating to the Company’s CD47 checkpoint inhibitor. Upon grant of the Development and Option Agreement, Celgene made a non-refundable upfront option payment for the exclusive license. In June 2013, Celgene opted to exercise its right to license the intellectual property rights associated with the Company’s CD47 therapeutic. The Company is also eligible to receive certain developmental and commercial milestones of an aggregate of $934.1 million, assuming the achievement of all potential milestones in the agreement, as well as percentage tiered royalties based on future worldwide sales, with rates ranging between the high single-digits and low teens. The Company is obligated to pay 2% of future amounts received under the Development and Option Agreement to advisors who assisted the Company with the negotiation and other matters in connection with the Development and Option Agreement.

Due to the uncertainty in the achievement of the developmental and commercial milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. This will be re-assessed at each reporting period. No revenue was recognized under this agreement during the years ended December 31, 2021 and 2020.

Government Grants

Grant revenue was recognized in accordance with the Company’s stated methodology discussed in Note 1.

CDMRP funded through the DoD

During September 2018, the Company was awarded a grant by the CDMRP funded through the DoD by the U.S. Army Medical Research Acquisition Activity in the amount of approximately $0.3 million for the continued development of multi-specific antibodies for the treatment against Acinetobacter baumannii infection by circumventing development of bacterial resistance, or the 2018 DoD grant. The work under this grant began in December 2018 and was completed in September 2020. In February 2021, the Company was awarded an additional grant from the DoD in the amount of approximately $0.3 million for the development of sdAb based therapeutics targeting SARS-CoV-2 Spike protein for the treatment of COVID-19, or the 2021 DoD grant. Work under the grant began in February 2021 and is expected to continue through February 2022.

Revenue from these grants is based upon internal and subcontractor costs incurred by the Company that are specifically covered by the grants, and where applicable, an additional facilities and administrative rate that provided funding for overhead expenses. Revenue is recognized when the Company incurs these covered expenses related to the grant’s continued progression. The Company submits requests for reimbursement to the DoD for only those expenses which have been incurred by the Company in each period, resulting in reimbursement in arrears.

As of December 31, 2021, $0.3 million has been recognized to date under the 2018 DoD grant, all of which has been received in cash from the DoD. As of December 31, 2021, $106,000 has been recognized to date under the 2021

DoD grant, $86,000 of which has been received in cash from the DoD. During each of the years ended December 31, 2021 and 2020, $106,000 and $80,000 was recognized as revenue under the grants, respectively.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Company’s Board of Directors or a committee thereof pursuant to policy.

LAV Summit Limited

LAV Summit Limited, or LAV SL, a limited company, is a principal shareholder owning more than 5% of the Company’s outstanding equity interest during the year ended December 31, 2021. Due to this equity ownership, LAV SL was considered a related party. LAV SL’s General Partner, Lilly Asia Ventures, or LAV, through one of its funds, holds a significant equity ownership position in Elpiscience, and the Venture Partner of LAV is the CEO, Founder, and Director at Elpiscience. Accordingly, the Company identified Elpiscience as a related party. As of December 31, 2021, LAV SL no longer holds more than 5% of the Company’s outstanding equity interest.

Elpiscience

In April 2018, the Company entered into the OX40 License Agreement with Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. Under this agreement, the Company is entitled to reimbursement for certain chemistry, manufacturing, and controls, or CMC, and toxicology expenses incurred for which Elpiscience has paid the Company approximately $5.2 million to date as of December 31, 2021. As of December 31, 2021, the Company has $0.2 million recorded as receivables from related parties from Elpiscience for expenses incurred which have not yet been reimbursed. Additional reimbursements of approximately $38,000 related to multi-year stability studies are expected to be recognized and paid upon completion. During the year ended December 31, 2021, the Company received no reimbursements for expenses already incurred. During the year ended December 31, 2020, the Company received reimbursements of $0.2 million for expenses already incurred. During the year ended December 31, 2021, the Company did not derecognize any expenses related to these reimbursements under the OX40 License Agreement. During the year ended December 31, 2020, the Company derecognized approximately $0.2 million of expenses related to these reimbursements under the OX40 License Agreement, respectively.

In July 2020, the Company entered into an additional cost sharing agreement with Elpiscience related to the OX40 License Agreement. Under this agreement, the Company is entitled to reimbursement for certain formulation development costs. Through December 31, 2021, the Company has received $0.2 million of reimbursements for expenses already incurred under this agreement. As of December 31, 2021, the Company has approximately $0.3 million recorded as receivables from related parties from Elpiscience for expenses incurred which have not yet been reimbursed. During the year ended December 31, 2021, the Company received reimbursements of $0.2 million for expenses already incurred. During the year ended December 31, 2021, the Company did not derecognize any expenses related to this agreement. During the year ended December 31, 2020, the Company received no reimbursements. During the year ended December 31, 2020, the Company derecognized $0.3 million of expenses related to this agreement.

In July 2021, the Company entered into a Sale and Purchase Agreement with Elpiscience, in which the Company sold drug substance supply to Elpiscience for approximately $37,000, for which it derecognized expenses during the year ended December 31, 2021. As of December 31, 2021, the Company has $37,000 recorded as receivables from related parties for this purchase.

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INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES The components of income tax expense (benefit) were as follows for the years ended December 31, 2021 and 2020, respectively (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Current expense:
State	$	2	$	3
Total current expense	$	2	$	3

The provision for the years ended December 31, 2021 and 2020 was related to California state income tax.

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2021 and 2020 as follows (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Expected income tax benefit at federal statutory rate	$	(17,171)	$	(15,985)
State income tax expense (benefit), net of federal benefit	(1,006)		4,548
Permanent items	(207)		2,291
R&D credits	(1,912)		(2,878)
Unrecognized tax benefits (FIN 48)	691		707
Return to provision true-ups	165		164
Valuation allowance	19,442		11,156
Income tax expense	$	2	$	3

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The components of net deferred income taxes were as follows (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Deferred income tax assets
Net operating loss carryforward	$	43,440	$	27,055
Research and development credits	8,539		6,465
Intangibles	3,875		4,176
Accruals	257		233
Stock compensation	1,888		409
Deferred revenue	456		806
Operating lease liabilities	1,428		1,733
Other	14		3
Gross deferred tax assets	59,897		40,880
Less: Valuation allowance	(58,528)		(39,087)
Total deferred tax assets	1,369		1,793
Deferred income tax liabilities
Fixed assets	(20)		(140)
Operating lease right-of-use assets	(1,349)		(1,653)
Total deferred tax liabilities	(1,369)		(1,793)
Net deferred tax assets (liabilities)	$	—	$	—

As of December 31, 2021, the Company had unused federal and state NOL carryforwards of approximately $198.9 million and $24.5 million, respectively. The federal NOL carryforwards may be carried forward indefinitely but are only available to offset up to 80% of pre-NOL taxable income each year. The state NOL carryforwards will begin to expire in 2038, if not utilized. As of December 31, 2021, the Company also had federal and state research tax credit carryforwards of $8.3 million and $3.9 million, respectively. The federal research tax credit carryforwards begin to expire in 2038, while the state carryforwards have no expiration.

The utilization of NOL and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

The Company has established a full valuation allowance against its deferred tax assets due to uncertainties that preclude it from determining that it is more likely than not that the Company will be able to generate sufficient taxable income to realize such assets. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2021. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. Based on this evaluation, as of December 31, 2021, a valuation allowance of $58.5 million has been recorded in order to measure only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be

given to subjective evidence, such as estimates of future taxable income during carryforward periods and the Company’s projections for growth.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Beginning balance	$	2,155	$	1,499
Increases related to current year tax positions	691		656
Ending balance	$	2,846	$	2,155

As of December 31, 2021, the Company had gross unrecognized tax benefits of $2.8 million, none of which would affect the effective tax rate due to the existence of a full valuation allowance. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within the next 12 months. The Company’s policy is to recognize the interest expense and/or penalties related to income tax matters as a component of income tax expense. The Company had no accrual for interest or penalties on its consolidated balance sheets as of December 31, 2021 or December 31, 2020, and has not recognized interest and/or penalties in its consolidated statements of operations for the years ended December 31, 2021 and 2020 as the unrecognized tax benefits relate to tax positions for which no cash tax liability has been reduced.

The Company is subject to income taxes in the United States and various state jurisdictions. The Company’s tax years from 2018 and forward are subject to examination by the United States and state tax authorities. The Company has not been, nor is it currently, under examination by the U.S. federal or any state tax authority.

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LEASES

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

LEASES

LEASES

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement for approximately 34,000 square feet as its sole location in La Jolla, California. The lease expires in June 2025 with an option to extend the lease an additional five years. The lease contained an initial base rent of approximately $0.1 million per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities by approximately 9,000 square feet and began occupying this space in January 2020. The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $30,000 per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The right-of-use asset and operating lease liability as of December 31, 2021 and 2020 are as follows:

	AS OF DECEMBER 31,
	2021		2020
Right-of-use asset	$	6,338	$	7,831
Operating lease liability
Current	1,674		1,503
Non-current	5,033		6,707
Total operating lease liability	$	6,707	$	8,210

During each of the years ended December 31, 2021 and 2020, the Company recognized operating lease expense of $3.1 million. As of December 31, 2021 and 2020, the Company’s operating lease had a remaining term of 3.5 and 4.5 years, respectively.

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 8.2% as of December 31, 2021 and 2020.

Future minimum rental payments under operating leases are as follows (in thousands):

	AS OF DECEMBER 31,
	2021
2022	2,161
2023	2,203
2024	2,247
2025	1,137
Total future minimum lease payments	$	7,748
Less: imputed interest	(1,041)
Present value of operating lease liability	6,707
Less: current portion of operating lease liability	(1,674)
Non-current portion of operating lease liability	$	5,033

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation

The Company is not party to any material legal proceedings. From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification obligation will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.

Purchase Commitments

The Company has several ongoing contracts with CROs for preclinical studies and clinical trials and with CDMOs for clinical supplies and manufacturing scale-up activities. These contracts are generally cancellable, with notice, at the Company’s option. The Company recorded accrued expenses of approximately $7.4 million and $11.5 million in its consolidated balance sheets for expenditures incurred by CROs and CDMOs as of December 31, 2021 and December 31, 2020, respectively.

While these contracts are generally cancellable, some may contain specific activities that involve one or more non-cancellable commitments, including minimum purchase commitments, binding annual forecasts, and capital equipment investments. Additionally, depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from cost of work performed to date and up to twelve months of future committed manufacturing costs. As of December 31, 2021 and December 31, 2020, the non-cancellable portion of these contracts total in aggregate, excluding amounts recorded in accounts payable and accrued expenses at each respective date, was approximately $2.4 million and $7.0 million, respectively. During the years ended December 31, 2021 and 2020, the Company incurred $1.0 million and $30.2 million of expenses related to these agreements, respectively.

Other Commitments

Additionally, as of December 31, 2021 and December 31, 2020, Mark P. Lappe, the Company’s Chief Executive Officer, Brendan P. Eckelman, the Company’s Chief Scientific Officer, and Kelly D. Deck, the Company’s Chief Financial Officer, and certain other members of management have agreements that provide for severance compensation in the event of termination or a change in control.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

For the audited consolidated financial statements as of December 31, 2021, the Company evaluated subsequent events to assess the need for potential recognition or disclosure in this report. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these consolidated financial statements, other than disclosures related to those outlined below.

Stock Option Issuance

During January and February 2022, the Company granted stock options to purchase an aggregate of 0.8 million common shares at a weighted average exercise price of $33.84 per share to employees under the 2017 Equity Incentive Plan. The Company granted these options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

Amendment to the 2020 Loan Agreement with Oxford

On February 18, 2022, the Company entered into an additional amendment to the 2020 Loan Agreement, or the February 2022 Amendment. The February 2022 Amendment provides for four additional tranches of term loans in an aggregate principal amount of up to $200.0 million, as follows: (a) an aggregate principal amount of $110.0 million, which includes the $70.0 million already outstanding; the incremental $40.0 million principal amount funded upon the closing of the February 2022 Amendment, or Term D, (b) an aggregate principal amount of $30.0 million, funded upon initiation of Part 4 of the INBRX-105 Phase 1 clinical trial, or Term E, (c) an aggregate principal of $30.0 million, funded upon the reception of positive topline Phase 1 data from INBRX-101 in AAT, or Term F, and (d) an aggregate principal amount of $30.0 million, funded upon the initiation of an INBRX-101 potential registration-enabling trial in AAT, or Term G. In accordance with the February 2022 Amendment, the Company paid a one-time amendment fee of $1.1 million, which is equal to the amount accreted for the final payment on the existing tranches at the time of the amendment. The terms of the three existing tranches under the Amended 2020 Loan Agreement were modified to align with the four additional tranches under the February 2022 Amendment.

The outstanding term loans will mature on January 1, 2027 and bear interest at the greater of (1) 8.30% and (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 8.19%. The repayment

schedule provides for interest-only payments through February 1, 2025, with principal payments beginning on March 1, 2025. The interest-only payments may be extended by 12 months through February 2026, with principal payments beginning on March 1, 2026, if the Company raises at least $100.0 million in upfront licensing or partnership proceeds by February 2025. The interest-only period is followed by 23 months of equal payments of principal plus interest, or if the interest-only period is extended, by 11 months of equal payments of principal plus interest. Upon the maturity date of January 1, 2027, a final payment of 9.0% of the total principal amount will be due to Oxford. The Company has the option to prepay the outstanding balance of the term loan in full prior to maturity, subject to a prepayment fee ranging from 1.0% to 3.0%, depending on the timing of the prepayment. The Company granted Oxford a first priority lien against all of its assets with a positive lien on intellectual property. All other terms of the Amended 2020 Loan Agreement remain outstanding.

Concurrently with the debt issuance upon the February 2022 Amendment, the Company issued to Oxford warrants to purchase 40,000 shares of the Company’s common stock at a strike price of $45.00 per share.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an annual report on the Form 10-K.

Principles of Consolidation

Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation.

Liquidity

Liquidity

As of December 31, 2021, the Company had an accumulated deficit of $227.1 million and cash and cash equivalents of $131.3 million. From its inception and through December 31, 2021, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements.

As discussed in Note 5, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. As of December 31, 2021, 921,042 shares have been sold pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Use of Estimates

Use of Estimates

The preparation of these consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to evaluation of embedded derivative instruments and beneficial conversion features, or BCFs, within its previously issued and outstanding convertible notes, whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of accounts receivable, accounts payable, accrued expense, its long-term debt, convertible notes, warrants, and derivative instruments as applicable. The carrying amounts of financial instruments such as accounts receivable, accounts payable, accrued expense, and convertible notes approximate their related fair values due to the short-term nature of these instruments. The carrying value of the Company’s debt approximates fair value due to its interest being reflective of current market rates for debt with similar terms and conditions. The Company’s derivative instruments and warrants are carried at fair value based on unobservable market inputs.

Cash and Cash Equivalents

Cash and Cash EquivalentsCash and cash equivalents are comprised of cash held in financial institutions including readily available checking and money market accounts.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

The Company continually evaluates its accounts receivable for all outstanding third-party balances to determine the potential exposure to a concentration of credit risk. The Company’s major third-party contracting parties, some of which account for significant balances in both accounts receivable and revenue, are generally large, credit-worthy biotechnology companies and government bodies. The Company assesses the collectability of accounts receivable through a review of its current aging, as well as an analysis of its historical collection rate, general economic conditions, and credit status of these third parties. As of December 31, 2021 and 2020, all outstanding accounts receivable were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

The Company currently depends on third-party suppliers for key materials and services used in its research and development, as well as manufacturing processes, and is subject to certain risks related to the loss of these third-party suppliers or their inability to supply the Company with adequate materials and services. In August 2018, the Company entered into a strategic alliance with WuXi Biologics (Hong Kong), Limited, or WuXi Biologics, pursuant to which the Company agreed, for three years and subject to certain conditions, to exclusively use WuXi Biologics to manufacture its therapeutic candidates on a project-by-project basis. In August 2021, the exclusivity provisions of the Wuxi Agreement expired, and the Company may use manufacturers other than Wuxi to manufacture its therapeutic candidates. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts, including WuXi Biologics, and is dependent on these third parties for the production of its therapeutic candidates in accordance with relevant regulations such as current Good Manufacturing Practices, or cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

Dividends

Dividends

As of December 31, 2021, the Company has never declared or paid any dividends on its common stock.

Additionally, the Amended 2020 Loan Agreement limits, among other things, the Company’s ability to pay dividends and make certain other payments. Any future determination to pay dividends on the Company’s common stock will be at the discretion of the Company’s board of directors and will depend upon, among other factors, the results of operations, financial condition, capital requirements, contract restrictions, business prospects and other factors the Company’s board of directors may deem relevant.

Property and Equipment, Net

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. The Company estimates useful lives as follows:

•machinery and equipment: three to five years;

•furniture and fixtures: three to five years; and

•computer software: four to five years.

Amortization of leasehold improvements is provided on a straight-line basis over the shorter of their estimated useful lives or the lease term. The costs of additions and betterments are capitalized, and repairs and maintenance costs are expensed in the periods incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. If such assets are considered impaired, the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, fair value being determined based upon future cash flows or appraised values, depending on the nature of the asset. The Company recognized no impairment losses during any of the periods presented within its consolidated financial statements.

Leases

Leases

The Company has two existing leases for its corporate headquarters in La Jolla, California. Its first lease commenced in June 2018. In May 2019, the Company signed an amendment to its lease agreement to expand the Company’s facilities, which commenced in January 2020 and is accounted for as a separate lease. The Company’s two existing leases are classified as operating leases.

For the long-term operating lease of its corporate headquarters, the Company recognized a right-of-use asset and lease liability on its consolidated balance sheet. The lease liability is determined as the present value of future lease payments using an estimated incremental borrowing rate that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise. Agreements are reviewed at

inception to determine if they contain a lease. Leases are reviewed and classified as operating or financing leases at commencement.

The Company has elected to exclude from its consolidated balance sheets recognition of leases having a term of 12 months or less (short-term leases) and has elected not to separate lease components and non-lease components for its long-term operating leases.

Rent expense for the operating leases are recognized on a straight-line basis over the lease term and is included in operating expense in the consolidated statements of operations for all periods presented.

Equity Method Investment

Equity Method Investment

The Company uses the equity method of accounting for equity investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. As discussed in Note 7, the Company received an equity investment in the form of a 10% equity interest as consideration in a series of agreements with Phylaxis (as defined below), which is accounted for as an equity method investment. The Company's proportionate share of the net income or loss of these companies is included as loss in equity method investment in the consolidated statement of operations. Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, legal form of the investee (e.g. limited liability corporation), participation in policy-making decisions, and material purchase and sale transactions. During the third quarter of 2020, the Company’s equity method investment was written down to zero as a result of the allocation of the Company’s share of losses of the investee. As of December 31, 2021 and 2020, the equity method investment remains at zero.

Derivative Liabilities

Derivative Liabilities

As discussed in Note 4, the convertible promissory note, or the 2019 Note, issued in May 2019 to DRAGSA 50 LLC, an entity affiliated with Viking Global Investors LP, or Viking, and the convertible promissory notes, or the 2020 Notes, issued in April 2020 to Viking and certain other investors contained embedded features that provided multiple settlement alternatives. Certain of these settlement features provided the noteholders with a right to a fixed number of the Company’s shares upon conversion of the note. Other settlement features provided the noteholders the right or the obligation to receive cash or a variable number of shares upon the completion of a capital raising transaction, change of control, qualified IPO (as defined in the 2019 Note and the 2020 Notes), or default of the Company. The Company evaluated each settlement alternative within the 2019 Note and the 2020 Notes under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 815-15, Embedded Derivatives and ASC Topic 815-40, Contracts in Entity’s Own Equity and determined certain of the settlement features would be accounted for as redemption features meeting the requirements for separate accounting as a single, compound derivative instrument.

This single, compound derivative instrument was accounted for as a liability at its estimated fair value as of the date of issuance, and then subsequently remeasured to fair value as of each balance sheet date, with the related remeasurement adjustment being recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. During August 2020, the Company consummated its IPO, resulting in the conversion of the 2019 Note and the 2020 Notes into shares of the Company’s common stock. As of December 31, 2021 and 2020, the derivative liabilities no longer exist.

Warrant Liabilities

Warrant Liabilities

As discussed in Note 3, in conjunction with the 2020 Loan Agreement with Oxford, the Company issued warrants for the purchase of: 1) its preferred stock if the Company remained privately-held or 2) common stock upon the successful completion of an IPO prior to December 31, 2020. Upon the issuance of the warrants in July 2020, pursuant to ASC Topic 480, the warrants were accounted for as liabilities and measured at their estimated fair value as of the date of issuance, based on the potential conversion into preferred stock. During August 2020, upon consummation of the Company’s IPO, the warrants were deemed to be issued for the purchase of common stock and

were no longer accounted for as liabilities. The change in fair value was recognized as a component of change in fair value of warrant liabilities in the consolidated statements of operations during the year ended December 31, 2020.

Fair Value Measurements

Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The 2019 Note and the 2020 Notes contained embedded derivative liabilities (see Note 4). The 2020 Loan Agreement contained warrant liabilities (see Note 3). Prior to the completion of the IPO in August 2020, these were classified within Level 3 of the hierarchy, since they were valued by using inputs that were unobservable in the market. Upon the consummation of the IPO in August 2020, the derivative liabilities and warrant liabilities no longer existed. As of December 31, 2021 and 2020, the Company had no financial liabilities measured at fair value.

The fair value of the Company’s derivative liabilities categorized in Level 3 of the fair value hierarchy during the year ended December 31, 2020 was determined, with the assistance of an independent third-party valuation specialist, using a lattice model. The valuation utilized unobservable inputs, including the discount rate, management’s assessment of the probability of various underlying events triggering the conversion of the Company’s 2019 Note and the 2020 Notes (as discussed in Note 4), such as an IPO, financing, or extraordinary event, and the current valuation of the Company determined with the assistance of an independent third-party valuation specialist. The warrant liabilities were valued using a Black-Scholes model upon issuance. As of December 31, 2020, the derivative liabilities no longer exist as a result of the conversion of the 2019 Note and the 2020 Notes upon the IPO. Additionally, as of December 31, 2020 the warrant liabilities have been reclassified into equity after the Oxford warrants became exercisable for common stock subsequent to the Company’s IPO.There were no financial instruments measured at fair value during the year ended December 31, 2021.

Deferred Financing Costs and Other Debt-Related Costs and Deferred Offering Costs

Deferred Financing Costs and Other Debt-Related Costs

Deferred financing costs are capitalized, recorded as an offset to the Company’s debt balances and amortized as interest expense over the term of the associated debt instrument using the effective interest method, pursuant to ASC Topic 835-30, Imputation of Interest. If the maturity of the debt is accelerated as a result of default or early debt repayment, the amortization would then be accelerated. Amounts paid related to debt financing activities are presented on the consolidated balance sheet as a direct deduction from the debt liability.

Deferred Offering Costs

The Company capitalizes costs that are directly associated with equity financings until such financings are consummated at which time such costs are recorded against the gross proceeds of the offering.

Legal, accounting, and filing fees related directly to the Company’s IPO were capitalized as deferred offering costs to be offset against proceeds upon the consummation of the IPO within stockholders’ equity (deficit). In August 2020, the Company completed its IPO and offset $11.0 million of IPO costs against the proceeds. No deferred offering costs were capitalized on the Company’s consolidated balance sheets as of December 31, 2020.

Legal, accounting, and filing fees related directly to the Company’s Shelf Registration are capitalized as deferred offering costs. Deferred offering costs associated with the Shelf Registration are reclassified to additional paid-in capital when the Company completes offerings under the Shelf Registration. In November 2021, the Company completed an offering under the Shelf Registration and offset $1.7 million of offering costs against the proceeds.

Revenue Recognition

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the consolidated balance sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements, or ASC Topic 808. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone

payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future are not material rights as they are contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Grant Revenue

The Company has been awarded grants from the Congressionally Directed Medical Research Program, or CDMRP, funded through the DoD. With respect to revenue derived from reimbursement of direct, out-of-pocket expenses for research and development costs associated with these grants, where the Company acts as a principal with discretion to choose suppliers, bears credit risk, and performs part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations.

Since there is no transfer of control of goods or services to the granting entities, the granting entities do not meet the definition of a “customer” as defined by ASC Topic 606 and therefore, these government grants and private not-for-profit institution grants are not within the scope of ASC Topic 606.

Revenue from these grants are based upon internal costs incurred that are specifically covered by the grant, plus an additional rate that provides funding for overhead expenses. Revenue is recognized as the Company incurs expenses related to the grant which is consistent with the concept of transfer of control of a service over time under ASC Topic 606.

Research and Development and Clinical Trial Accruals

Research and Development and Clinical Trial Accruals Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the

differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.

The utilization of unused federal and state net operating losses, or NOLs, and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code, as amended, or IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

Net Loss Per Share

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two class method required for participating securities as the convertible preferred stock is considered a participating security. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Accordingly, for the years ended December 31, 2021 and 2020, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Fair Value of Stock-Based Awards

Fair Value of Stock-Based Awards The Company recognizes compensation costs related to stock options based on the estimated fair value of the awards on the date of grant. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model. The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes forfeitures as they occur.

Other Comprehensive Income

Other Comprehensive Income The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

Segment Information

Segment Information The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise stated, the Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which addresses the accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; and (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. The provisions of this guidance are to be applied prospectively upon their effective date. ASU 2020-01 was effective for fiscal years beginning after December 15, 2020, and interim periods within those years. Early adoption was permitted, but required simultaneous adoption of all provisions of this guidance. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves consistent application and simplification of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 was effective for fiscal years beginning after December 15, 2020. The Company adopted this guidance as of January 1, 2021, which did not result in a material impact on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options, or Subtopic 470-20 and Derivatives and Hedging—Contracts in Entity’s Own Equity, or Subtopic 815-40: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Specifically, ASU 2020-06 simplifies accounting for the issuance of convertible instruments by removing major separation models required under current GAAP. In addition, the ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share, or EPS, calculation in certain areas. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, beginning in fiscal years which begin after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 under a modified retrospective approach as of January 1, 2021. As a result of the adoption, there was no impact on retained earnings or other components of equity or to earnings per share in the Company’s consolidated financial statements.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 362), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods therein, and early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2021-04 may have on its consolidated financial statements and related disclosures.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Reconciliation of Notes Measured at Fair Value Using Level 3 Unobservable Inputs

Prior to the completion of the IPO in August 2020, the Company’s liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) included the derivative liabilities related to the 2019 Note and the 2020 Notes and the warrants issued with the 2020 Loan Agreement. The following table provides a reconciliation of financial instruments measured at fair value using Level 3 unobservable inputs for the year ended December 31, 2020 (in thousands):

Balance as of December 31, 2019	$	1,916
Establishment of derivative liability on the 2020 Notes	735
Establishment of warrant liabilities on the 2020 Loan Agreement	115
Change in fair value of derivative liabilities on the 2019 and 2020 Notes	(2,651)
Change in fair value of warrant liabilities	24
Reclassification of warrant liabilities into equity	(139)
Balance as of December 31, 2020	$	—

Schedule of Potential Dilutive Securities Excluded from Diluted Loss Per Share

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF DECEMBER 31,
	2021	2020
Outstanding stock options	4,064	2,525
Warrant to purchase common stock	7	7
	4,071	2,532

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OTHER FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Outside research and development services	$	6,343	$	2,204
Other	590		689
Prepaid expense and other current assets	$	6,933	$	2,893

Schedule of Property and Equipment

Property and equipment, net were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Machinery and equipment	$	6,286	$	5,652
Leasehold improvements	441		441
Furniture and fixtures	514		507
Computer software	42		—
Construction in process	281		257
Total property and equipment	7,564		6,857
Less: accumulated depreciation and amortization	(4,411)		(3,365)
Property and equipment, net	$	3,153	$	3,492

Depreciation and amortization expense totaled $1.2 million and $1.0 million for the years ended December 31, 2021 and 2020, respectively, and consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	1,003	$	836
General and administrative	192		183
Total depreciation and amortization expense	$	1,195	$	1,019

Schedule of Accrued Expenses

Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Clinical research and development	$	4,496	$	970
Other outside research and development	2,893		10,559
Compensation expense	1,322		1,165
Professional fees	261		282
Other	649		381
Accrued expenses	$	9,621	$	13,357

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DEBT (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following (in thousands).

	AS OF DECEMBER 31,
	2021		2020
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		—
Less: Debt discount	(5,830)		(3,456)
Total debt	70,470		29,244
Less: Current portion, including debt discount	—		—
Long-term debt, including debt discount	$	70,470	$	29,244

Schedule of Maturities of Long-term Debt

Through 2024, the Company is only required to make interest payments on the outstanding principal balance, with future principal payments and final fee payments beginning in 2025, as follows (in thousands):

	AS OF DECEMBER 31, 2021
	2021
2025	$	76,300
Total future minimum payments	76,300
Less: unamortized debt discount	(5,830)
Total debt	$	70,470

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EQUITY COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Stock Options Activity

A summary of the Company’s stock option activity under its 2017 Plan for the year ended December 31, 2021 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2020	2,525	$	11.80
Granted	2,307	$	32.00
Forfeited	(410)	$	23.09
Exercised	(358)	$	11.05
Outstanding as of December 31, 2021	4,064	$	22.19	8.3	$	87,303
Vested and exercisable as of December 31, 2021	1,253	$	11.37	7.1	$	40,468

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the years ended December 31, 2021 and 2020 were as follows. 

	YEAR ENDED DECEMBER 31,
	2021			2020
Risk-free interest rate	0.71		%	0.42		%
Expected volatility	93.49		%	97.72		%
Expected dividend yield	—		%	—		%
Expected term	6.08			6.08
Weighted average fair value	$	24.20		$	10.82

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense for stock options consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Research and development	$	11,830	$	4,300
General and administrative	3,218		723
Total stock-based compensation expense	$	15,048	$	5,023

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LICENSE AND GRANT REVENUES (Tables)

12 Months Ended

Dec. 31, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Schedule of License and Grant Revenue

The following table summarizes the total revenue recorded in the Company’s consolidated statements of operations (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
License fee revenue from affiliates
Elpiscience Biopharmaceuticals, Inc.	$	—	$	2,000
Total license fee revenue from affiliates	—		2,000
License fee revenue from non-affiliates
2seventy bio, Inc.	4,200		400
Phylaxis BioScience, LLC	2,392		1,993
Chiesi Farmaceutici S.p.A.	533		7,365
Other license revenues from non-affiliates	—		1,050
Total license fee revenue from non-affiliates	7,125		10,808
Grant revenue
Congressionally Directed Medical Research Program	106		80
Total grant revenue	106		80
Total revenue	$	7,231	$	12,888

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) were as follows for the years ended December 31, 2021 and 2020, respectively (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Current expense:
State	$	2	$	3
Total current expense	$	2	$	3

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2021 and 2020 as follows (in thousands):

	YEAR ENDED DECEMBER 31,
	2021		2020
Expected income tax benefit at federal statutory rate	$	(17,171)	$	(15,985)
State income tax expense (benefit), net of federal benefit	(1,006)		4,548
Permanent items	(207)		2,291
R&D credits	(1,912)		(2,878)
Unrecognized tax benefits (FIN 48)	691		707
Return to provision true-ups	165		164
Valuation allowance	19,442		11,156
Income tax expense	$	2	$	3

Schedule of Deferred Tax Assets and Liabilities

The components of net deferred income taxes were as follows (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Deferred income tax assets
Net operating loss carryforward	$	43,440	$	27,055
Research and development credits	8,539		6,465
Intangibles	3,875		4,176
Accruals	257		233
Stock compensation	1,888		409
Deferred revenue	456		806
Operating lease liabilities	1,428		1,733
Other	14		3
Gross deferred tax assets	59,897		40,880
Less: Valuation allowance	(58,528)		(39,087)
Total deferred tax assets	1,369		1,793
Deferred income tax liabilities
Fixed assets	(20)		(140)
Operating lease right-of-use assets	(1,349)		(1,653)
Total deferred tax liabilities	(1,369)		(1,793)
Net deferred tax assets (liabilities)	$	—	$	—

Schedule of Unrecognized Tax Benefits Roll Forward

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):

	AS OF DECEMBER 31,
	2021		2020
Beginning balance	$	2,155	$	1,499
Increases related to current year tax positions	691		656
Ending balance	$	2,846	$	2,155

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LEASES (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Schedule of Operating Lease, by Balance Sheet Location

The right-of-use asset and operating lease liability as of December 31, 2021 and 2020 are as follows:

	AS OF DECEMBER 31,
	2021		2020
Right-of-use asset	$	6,338	$	7,831
Operating lease liability
Current	1,674		1,503
Non-current	5,033		6,707
Total operating lease liability	$	6,707	$	8,210

Schedule of Operating Lease Maturity

Future minimum rental payments under operating leases are as follows (in thousands):

	AS OF DECEMBER 31,
	2021
2022	2,161
2023	2,203
2024	2,247
2025	1,137
Total future minimum lease payments	$	7,748
Less: imputed interest	(1,041)
Present value of operating lease liability	6,707
Less: current portion of operating lease liability	(1,674)
Non-current portion of operating lease liability	$	5,033

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IPO (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Aug. 21, 2020	Dec. 31, 2020	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Conversion of outstanding warrants to purchase convertible preferred stock into common stock (in shares)	7,354
Common stock, shares authorized (in shares)	120,000,000	120,000,000	120,000,000
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000	15,000,000
Common Stock
Subsidiary, Sale of Stock [Line Items]
Issuance of shares in conversion of convertible securities (in shares)	7,211,086
Convertible Preferred Stock | Common Stock
Subsidiary, Sale of Stock [Line Items]
Issuance of shares in conversion of convertible securities (in shares)	7,211,086	7,211,000
2019 and 2020 Notes | Common Stock
Subsidiary, Sale of Stock [Line Items]
Issuance of shares in conversion of convertible securities (in shares)		4,295,000
2019 and 2020 Notes | Convertible Debt
Subsidiary, Sale of Stock [Line Items]
Issuance of shares of common stock after conversion (in shares)	4,294,603
IPO
Subsidiary, Sale of Stock [Line Items]
Sale of stock, shares issued (in shares)	8,050,000
Sale of stock, price per share (in dollars per share)	$ 17.00
Sale of stock, proceeds received	$ 125.9

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)			1 Months Ended			12 Months Ended
	Aug. 11, 2020	May 11, 2020 USD ($)	Dec. 31, 2021 USD ($) lease shares	Sep. 30, 2021 USD ($)	Aug. 31, 2020 USD ($)	Dec. 31, 2021 USD ($) segment lease shares	Dec. 31, 2020 USD ($)	Nov. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jul. 31, 2020	Apr. 30, 2020 USD ($)
Property, Plant and Equipment [Line Items]
Reverse stock split ratio	0.5753
Accumulated deficit			$ (227,147,000)			$ (227,147,000)	$ (145,379,000)
Cash and cash equivalents			131,301,000			131,301,000	128,664,000
Common stock offering price				$ 200,000,000
Proceeds from the Paycheck Protection Program loan						0	1,875,000
Deferred payment of federal payroll taxes			100,000			$ 100,000					$ 400,000
Payments associated with equity offering			$ 300,000
Number of operating leases held | lease			2			2
Costs associated with initial public offering					$ 11,000,000
Deferred offering costs								$ 1,700,000
Number of operating segments | segment						1
Sales Agreement
Property, Plant and Equipment [Line Items]
Common stock shares sold (in shares) | shares			921,042			921,042
Sale of stock, proceeds received						$ 40,200,000
PPP Loan | Notes Payable, Other Payables
Property, Plant and Equipment [Line Items]
Proceeds from the Paycheck Protection Program loan		$ 1,900,000
Phylaxis BioScience, LLC
Property, Plant and Equipment [Line Items]
Equity interest percentage										10.00%
Equity method investment			$ 0			$ 0	$ 0		$ 0
Affiliates | WuXi Biologics Healthcare Venture
Property, Plant and Equipment [Line Items]
Collaborative arrangement, term					3 years
Minimum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment useful life						3 years
Minimum | Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment useful life						3 years
Minimum | Computer software
Property, Plant and Equipment [Line Items]
Property and equipment useful life						4 years
Maximum | Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment useful life						5 years
Maximum | Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment useful life						5 years
Maximum | Computer software
Property, Plant and Equipment [Line Items]
Property and equipment useful life						5 years

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation Measured at Fair Value Using Level 3 Inputs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Warrant And Derivative Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,916
Ending balance	0
Warrants to purchase common stock
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Establishment of liabilities	115
Change in fair value of liabilities	24
Reclassification of liabilities into equity	(139)
2020 Convertible Note | Derivative liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Establishment of liabilities	735
2019 and 2020 Notes | Derivative liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value of liabilities	$ (2,651)

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potential Dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	4,071,000	2,532,000
Stock Option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	4,064,000	2,525,000
Warrants to purchase common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	7,000	7,000

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OTHER FINANCIAL INFORMATION - Prepaid Expense and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Outside research and development services	$ 6,343	$ 2,204
Other	590	689
Prepaid expense and other current assets	$ 6,933	$ 2,893

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OTHER FINANCIAL INFORMATION - Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 7,564	$ 6,857
Less: accumulated depreciation and amortization	(4,411)	(3,365)
Property and equipment, net	3,153	3,492
Depreciation and amortization	1,195	1,019
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	6,286	5,652
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	441	441
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	514	507
Computer software
Property, Plant and Equipment [Line Items]
Total property and equipment	42	0
Construction in process
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 281	$ 257

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OTHER FINANCIAL INFORMATION - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 1,195	$ 1,019
Research and development
Property, Plant and Equipment [Line Items]
Depreciation and amortization	1,003	836
General and administrative
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 192	$ 183

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OTHER FINANCIAL INFORMATION - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Clinical research and development	$ 4,496	$ 970
Accrued Outside Research And Development, Other, Current	2,893	10,559
Compensation expense	1,322	1,165
Professional fees	261	282
Other	649	381
Accrued expenses	$ 9,621	$ 13,357

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DEBT - Narrative (Details) $ / shares in Units, $ in Thousands				12 Months Ended
	Jun. 18, 2021 USD ($)	Nov. 12, 2020 USD ($) tranche	Jul. 15, 2020 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Aug. 31, 2020 USD ($)
Debt Instrument [Line Items]
Proceeds from the issuance of debt				$ 39,992	$ 29,938
Equal payments of principal and interest period if interest only period is extended				11 months
Warrants Issued Concurrently With 2020 Loan Agreement
Debt Instrument [Line Items]
Common or preferred stock warrants issued as a percent of funded amount			1.25%
Warrants issued, amount			$ 125
Warrants Issued Concurrently With 2020 Loan Agreement | Preferred Stock
Debt Instrument [Line Items]
Warrants liability			120
2020 Oxford Term Loans Term B, Term C & Tranche 1 of Term A | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt			10,000
2020 Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Debt issuance costs			$ 100
Total long-term debt				$ 76,300
Debt interest expense				$ 5,400	$ 900
2020 Loan Agreement | Secured Debt | Minimum
Debt Instrument [Line Items]
Prepayment fee			1.00%
2020 Loan Agreement | Secured Debt | Maximum
Debt Instrument [Line Items]
Prepayment fee			3.00%
2020 Loan Agreement | Secured Debt | Warrants Issued Upon Consummation of IPO
Debt Instrument [Line Items]
Warrants liability						$ 140
Warrants exercisable for shares of common stock (in shares) | shares				7,354	7,354
Warrant price (in dollars per share) | $ / shares				$ 17.00	$ 17.00
Amended 2020 Oxford Term Loan Tranche One | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt		$ 20,000
Amended 2020 Oxford Term Loan | Secured Debt
Debt Instrument [Line Items]
Debt issuance costs		20
One-time first amendment fee		$ 700
Number of additional tranches | tranche		2
Aggregate principal amount of additional tranches		$ 50,000
Total long-term debt				$ 70,000
Annual interest rate				7.96%
Percentage of principal amount for final payment				9.00%
Periodic payment terms, final payment amount				$ 6,300
Amended 2020 Oxford Term Loan | Secured Debt | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				7.80%
Amended 2020 Oxford Term Loan Tranche Two | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt		$ 20,000
Amended 2020 Oxford Term Loan June 2021 Amendment | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt	$ 40,000
Debt issuance costs	$ 10
Minimum cash balance				$ 20,000
2015 Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Debt interest expense					$ 44

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DEBT - Outstanding Debt Balance 2020 Loan Agreement (Details) - Secured Debt - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
2020 Loan Agreement
Debt Instrument [Line Items]
Term loan	$ 76,300
Less: Debt discount	(5,830)	$ (3,456)
Total debt	70,470	29,244
Less: Current portion, including debt discount	0	0
Long-term debt, including debt discount	70,470	29,244
Term A
Debt Instrument [Line Items]
Term loan	10,900	10,900
Term B
Debt Instrument [Line Items]
Term loan	21,800	21,800
Term C
Debt Instrument [Line Items]
Term loan	$ 43,600	$ 0

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DEBT - Future Minimum Payments (Details) - 2020 Loan Agreement - Secured Debt - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
2025	$ 76,300
Total future minimum payments	76,300
Less: unamortized debt discount	(5,830)	$ (3,456)
Total debt	$ 70,470	$ 29,244

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CONVERTIBLE PROMISSORY NOTE (Details) - USD ($)		12 Months Ended		16 Months Ended
	Aug. 21, 2020	Dec. 31, 2021	Dec. 31, 2020	Aug. 21, 2020	Jun. 30, 2020	Apr. 30, 2020	Feb. 29, 2020	May 20, 2019
Debt Instrument [Line Items]
Other income related to changes in fair value of derivative liability		$ 0	$ 2,651,000
Additional Paid-in Capital
Debt Instrument [Line Items]
Reversal of unamortized BCF	$ 7,400,000
Convertible Debt
Debt Instrument [Line Items]
Derivative liability					$ 0
Other income related to changes in fair value of derivative liability			2,700,000
Charge of amortized debt issuance costs to interest expense	2,200,000
2019 Convertible Note
Debt Instrument [Line Items]
Reversal of unamortized BCF			5,332,000
2019 Convertible Note | Additional Paid-in Capital
Debt Instrument [Line Items]
Reversal of unamortized BCF			5,332,000
2019 Convertible Note | Convertible Debt
Debt Instrument [Line Items]
Note aggregate principal amount								$ 40,000,000
Note monthly interest rate							1.50%
Total debt	$ 43,700,000			$ 43,700,000
Conversion price (in dollars per share)	$ 14.35			$ 14.35
Issuance of shares of common stock after conversion (in shares)	3,046,467
Amortization of debt discount				$ 8,700,000
Unamortized debt discounts	$ 6,900,000			6,900,000
2020 Convertible Note
Debt Instrument [Line Items]
Reversal of unamortized BCF			2,107,000
2020 Convertible Note | Additional Paid-in Capital
Debt Instrument [Line Items]
Reversal of unamortized BCF			$ 2,107,000
2020 Convertible Note | Convertible Debt
Debt Instrument [Line Items]
Note aggregate principal amount						$ 15,000,000
Note monthly interest rate						1.00%
Total debt	$ 15,700,000			$ 15,700,000
Conversion price (in dollars per share)	$ 12.56			$ 12.56
Issuance of shares of common stock after conversion (in shares)	1,248,136
Unamortized debt discounts	$ 2,700,000			$ 2,700,000

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STOCKHOLDERS’ EQUITY (DEFICIT) (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Aug. 21, 2020	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Temporary Equity [Line Items]
Common stock, shares authorized (in shares)	120,000,000		120,000,000	120,000,000
Preferred stock, shares authorized (in shares)	15,000,000		15,000,000	15,000,000
Common stock, par value (in dollars per share)	$ 0.0001		$ 0.0001	$ 0.0001
Preferred stock, par value (in dollars per share)	$ 0.0001		$ 0.0001	$ 0.0001
Common stock offering price		$ 200,000
Commission percent		3.00%
At the market offering costs			$ 500
Sales Agreement
Temporary Equity [Line Items]
Common stock shares sold (in shares)			921,042
Sale of stock, proceeds received			$ 40,200
Commissions costs			$ 1,200
Warrants Issued Upon Consummation of IPO | 2020 Loan Agreement | Secured Debt
Temporary Equity [Line Items]
Warrants exercisable for shares of common stock (in shares)			7,354	7,354
Warrant price (in dollars per share)			$ 17.00	$ 17.00
Common Stock
Temporary Equity [Line Items]
Issuance of shares in conversion of convertible securities (in shares)	7,211,086
Additional Paid-in Capital
Temporary Equity [Line Items]
Warrants outstanding			$ 140

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EQUITY COMPENSATION PLANS - Narrative (Details) - USD ($) $ in Thousands, shares in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	4.5
Available shares reserved for issuance (in shares)	0.1
Aggregate intrinsic value of options exercised	$ 7,500	$ 19
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Contractual term	10 years
Unrecognized stock-based compensation expense	$ 47,000
Weighted-average period of recognition	3 years 14 days
Cliff Vesting | Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year

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EQUITY COMPENSATION PLANS - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Number of Shares
Outstanding, beginning balance (in shares) | shares	2,525
Granted (in shares) | shares	2,307
Forfeited (in shares) | shares	(410)
Exercised (in shares) | shares	(358)
Outstanding, ending balance (in shares) | shares	4,064
Vested and exercisable (in shares) | shares	1,253
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 11.80
Granted (in dollars per share) | $ / shares	32.00
Forfeited (in dollars per share) | $ / shares	23.09
Exercised (in dollars per share) | $ / shares	11.05
Outstanding, ending balance (in dollars per share) | $ / shares	22.19
Vested and exercisable (in dollars per share) | $ / shares	$ 11.37
WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM	8 years 3 months 18 days
WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM, Vested and exercisable	7 years 1 month 6 days
AGGREGATE INTRINSIC VALUE Beginning value | $
AGGREGATE INTRINSIC VALUE Ending value | $	$ 87,303
AGGREGATE INTRINSIC VALUE, Vested and exercisable | $	$ 40,468

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EQUITY COMPENSATION PLANS - Fair Value of Stock Option Grants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value (in dollars per share)	$ 24.20	$ 10.82
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.71%	0.42%
Expected volatility	93.49%	97.72%
Expected dividend yield	0.00%	0.00%
Expected term	6 years 29 days	6 years 29 days

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EQUITY COMPENSATION PLANS - Stock-based Compensation Expense (Details) - Stock Option - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 15,048	$ 5,023
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	11,830	4,300
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 3,218	$ 723

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LICENSE AND GRANT REVENUES - Revenue Summary (Details) - USD ($)	1 Months Ended		12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			$ 7,231,000	$ 12,888,000
License fee revenue, affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			0	2,000,000
License fee revenue, affiliates | Elpiscience Biopharmaceuticals, Inc.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	$ 2,000,000		0	2,000,000
License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			7,125,000	10,808,000
License fee revenue, non-affiliates | 2seventy bio, Inc.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue		$ 400,000	4,200,000	400,000
License fee revenue, non-affiliates | Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			2,392,000	1,993,000
License fee revenue, non-affiliates | Chiesi Farmaceutici S.p.A.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			533,000	7,365,000
License fee revenue, non-affiliates | Other license revenues from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			0	1,050,000
Grant revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			106,000	80,000
Grant revenue | Congressionally Directed Medical Research Program
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			$ 106,000	$ 80,000

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LICENSE AND GRANT REVENUES - License and Collaboration Agreements (Details)	1 Months Ended								12 Months Ended
	Oct. 31, 2021 USD ($)	Aug. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)	May 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jul. 31, 2020 USD ($) compound performanceObligation	Jun. 30, 2020 USD ($) performanceObligation license program	Aug. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)	Aug. 19, 2019 performanceObligation	Dec. 20, 2018 USD ($)	Apr. 30, 2018 USD ($)	Jun. 30, 2013 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									$ 7,231,000	$ 12,888,000
Current portion of deferred revenue									2,034,000	3,081,000
Non-current portion of deferred revenue									110,000	737,000
License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									7,125,000	10,808,000
License fee revenue, affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									0	2,000,000
Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Equity interest percentage						10.00%
Additional equity interest percentage entitled to receive						5.00%
Equity method investment					$ 0				$ 0	0
Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Development milestone payment receivable						$ 225,000,000
Nonrefundable, upfront payment						$ 2,500,000
Number of performance obligations | performanceObligation						1
Additional payable due from agreement						$ 2,500,000					$ 1,250,000
Additional payment receivable period									180 days
Commercialization milestone payment receivable						175,000,000
Equity method investment						500,000
Payments due pursuant to agreement						$ 5,000,000
Number of compounds | compound						2
Current portion of deferred revenue									$ 1,100,000	1,600,000
Non-current portion of deferred revenue										600,000
Phylaxis BioScience, LLC | License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									2,392,000	1,993,000
Revenue recognized related to performance obligation									2,400,000	2,000,000
2seventy bio, Inc.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Development milestone payment receivable							$ 51,500,000						$ 51,500,000
Exclusive development license | license							2
2seventy bio, Inc. | License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue							$ 400,000		4,200,000	400,000
2seventy bio, Inc. | Initial Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Number of programs related to collaborative agreement | program							2
Nonrefundable, upfront payment							$ 400,000
Number of performance obligations | performanceObligation							1
2seventy bio, Inc. | Initial Programs, Program 1
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment							$ 200,000
2seventy bio, Inc. | Initial Programs, Program 2
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment							$ 200,000
2seventy bio, Inc. | Additional Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Number of programs related to collaborative agreement | program							8
2seventy bio, Inc. | 2018 Option and License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Milestone payment received		$ 2,000,000
2seventy bio, Inc. | 2018 Option and License Agreement | License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue			$ 2,000,000						2,000,000	0
2seventy bio, Inc. | 2020 Option And License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Option extension fee	$ 2,100,000			$ 100,000
2seventy bio, Inc. | 2020 Option And License Agreement | License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	$ 2,100,000			$ 100,000					2,200,000	400,000
Chiesi Farmaceutici S.p.A.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Milestone payments receivable								$ 122,500,000
Nonrefundable, upfront payment								10,000,000
Number of performance obligations | performanceObligation												1
Additional payable due from agreement								$ 12,500,000
Current portion of deferred revenue									900,000	1,400,000
Non-current portion of deferred revenue									100,000	100,000
Chiesi Farmaceutici S.p.A. | License fee revenue, non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									533,000	7,365,000
Revenue recognized related to performance obligation									500,000	7,400,000
Elpiscience Biopharmaceuticals, Inc. | License fee revenue, affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue					$ 2,000,000				$ 0	$ 2,000,000
Elpiscience Biopharmaceuticals, Inc. | OX40 License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Milestone payments receivable														$ 100,000,000
Celgene
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Development milestone payment receivable															$ 934,100,000
Percentage due to advisors															0.02

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LICENSE AND GRANT REVENUES - Government Grants (Details) - USD ($) $ in Thousands	11 Months Ended	12 Months Ended		37 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Feb. 28, 2021	Sep. 30, 2018
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue		$ 7,231	$ 12,888
Congressionally Directed Medical Research Program, 2018 Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Grant award						$ 300
Congressionally Directed Medical Research Program, 2021 Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Grant award					$ 300
Grant revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue		106	80
Grant revenue | Congressionally Directed Medical Research Program, 2018 Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue				$ 300
Grant revenue | Congressionally Directed Medical Research Program, 2021 Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	$ 106
Revenue recognized, cash	$ 86
Grant revenue | Congressionally Directed Medical Research Program
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue		$ 106	$ 80

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RELATED PARTY TRANSACTIONS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Elpiscience Biopharmaceuticals, Inc. | Sale And Purchase Agreement
Related Party Transaction [Line Items]
Liabilities derecognized from agreements	$ 37,000
Receivables from related parties	37,000
Elpiscience Biopharmaceuticals, Inc. | OX40 License Agreement
Related Party Transaction [Line Items]
Reimbursement for related party transaction expenses incurred to date	5,200,000
Receivable for expenses incurred, not yet reimbursed	200,000
Expenses expected to be reimbursed	38,000
Reimbursement expenses	0	$ 200,000
Liabilities derecognized from agreements	0	200,000
Elpiscience Biopharmaceuticals, Inc. | OX40 License Agreement | Cost Sharing Agreement
Related Party Transaction [Line Items]
Reimbursement for related party transaction expenses incurred to date	200,000
Reimbursement expenses	200,000
Liabilities derecognized from agreements		$ 300,000
Receivables from related parties	$ 300,000
Affiliates | LAV Summit Limited
Related Party Transaction [Line Items]
Ownership interest, more than	5.00%

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INCOME TAXES - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Tax Credit Carryforward [Line Items]
Deferred tax asset valuation allowance	$ 58,528,000	$ 39,087,000
Gross unrecognized tax benefits	2,846,000	2,155,000	$ 1,499,000
Accrual for interest and penalties	0	0
Recognized interest and penalties	0	$ 0
Federal
Tax Credit Carryforward [Line Items]
Net operating loss carryforwards	198,900,000
Federal | Research Tax Credit Carryforward
Tax Credit Carryforward [Line Items]
Tax credit carryforward	8,300,000
State
Tax Credit Carryforward [Line Items]
Net operating loss carryforwards	24,500,000
State | Research Tax Credit Carryforward
Tax Credit Carryforward [Line Items]
Tax credit carryforward	$ 3,900,000

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INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
State	$ 2	$ 3
Provision for income taxes	$ 2	$ 3

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INCOME TAXES - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Expected income tax benefit at federal statutory rate	$ (17,171)	$ (15,985)
State income tax expense (benefit), net of federal benefit	(1,006)	4,548
Permanent items	(207)	2,291
R&D credits	(1,912)	(2,878)
Unrecognized tax benefits (FIN 48)	691	707
Return to provision true-ups	165	164
Valuation allowance	19,442	11,156
Provision for income taxes	$ 2	$ 3

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INCOME TAXES - Components of net deferred income taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred income tax assets
Net operating loss carryforward	$ 43,440	$ 27,055
Research and development credits	8,539	6,465
Intangibles	3,875	4,176
Accruals	257	233
Stock compensation	1,888	409
Deferred revenue	456	806
Operating lease liabilities	1,428	1,733
Other	14	3
Gross deferred tax assets	59,897	40,880
Less: Valuation allowance	(58,528)	(39,087)
Total deferred tax assets	1,369	1,793
Deferred income tax liabilities
Fixed assets	(20)	(140)
Operating lease right-of-use assets	(1,349)	(1,653)
Total deferred tax liabilities	(1,369)	(1,793)
Net deferred tax assets (liabilities)	$ 0	$ 0

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INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Unrecognized Tax Benefits [Roll Forward]
Beginning balance	$ 2,155	$ 1,499
Increases related to current year tax positions	691	656
Ending balance	$ 2,846	$ 2,155

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LEASES - Narrative (Details) ft² in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	May 31, 2019 USD ($) ft²	Sep. 30, 2017 USD ($) ft²
Leases [Abstract]
Lease agreement term				7 years
Square footage of lease agreement (in sq feet) | ft²				34
Lease extension term				5 years
Initial base rent per month | $			$ 30	$ 100
Annual escalations			2.00%	2.00%
Square footage of lease extension agreement (in sq feet) | ft²			9
Operating Lease, Expense | $	$ 3,100	$ 3,100
Remaining term of operating lease	3 years 6 months	4 years 6 months
Weighted-average discount rate	8.20%	8.20%

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LEASES - Schedule of Right-Of-Use Asset and Operating Lease Liability (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Right-of-use asset	$ 6,338	$ 7,831
Current portion of lease liability	1,674	1,503
Non-current portion of lease liability	5,033	6,707
Total operating lease liability	$ 6,707	$ 8,210

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LEASES - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
2022	$ 2,161
2023	2,203
2024	2,247
2025	1,137
Total future minimum lease payments	7,748
Less: imputed interest	(1,041)
Total operating lease liability	6,707	$ 8,210
Less: current portion of operating lease liability	(1,674)	(1,503)
Non-current portion of lease liability	$ 5,033	$ 6,707

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Other Commitments [Line Items]
Clinical research and development	$ 4,496	$ 970
Non-cancellable portion of contract	2,400	7,000
Expenses related to agreements	1,000	30,200
Purchase Commitment
Other Commitments [Line Items]
Clinical research and development	$ 7,400	$ 11,500

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SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands			2 Months Ended	12 Months Ended
	Feb. 18, 2022 USD ($) tranche $ / shares shares	Nov. 12, 2020 USD ($) tranche	Feb. 28, 2022 $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($)
Subsequent Event [Line Items]
Stock options granted (in shares) | shares				2,307,000
Award granted, weighted average exercise price (in dollars per share) | $ / shares				$ 32.00
Proceeds from the issuance of debt				$ 39,992	$ 29,938
Equal payments of principal and interest period if interest only period is extended				11 months
Amended 2020 Oxford Term Loan | Secured Debt
Subsequent Event [Line Items]
Number of additional tranches | tranche		2
Aggregate principal amount of additional tranches		$ 50,000
Term loan				$ 70,000
One-time first amendment fee		700
Annual interest rate				7.96%
Percentage of principal amount for final payment				9.00%
Amended 2020 Oxford Term Loan | Secured Debt | LIBOR
Subsequent Event [Line Items]
Basis spread on variable rate				7.80%
Amended 2020 Oxford Term Loan Tranche One | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt		20,000
Outstanding debt				$ 70,000
Amended 2020 Oxford Term Loan Tranche Two | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt		$ 20,000
Stock Option
Subsequent Event [Line Items]
Vesting period				4 years
Contractual term				10 years
Stock Option | Cliff Vesting
Subsequent Event [Line Items]
Vesting period				1 year
Subsequent Event
Subsequent Event [Line Items]
Upfront partnership proceeds	$ 100,000
Equal payments of principal and interest period	23 months
Equal payments of principal and interest period if interest only period is extended	11 months
Warrants issued (in shares) | shares	40,000
Warrant price (in dollars per share) | $ / shares	$ 45.00
Subsequent Event | Amended 2020 Oxford Term Loan | Secured Debt
Subsequent Event [Line Items]
Number of additional tranches | tranche	4
Aggregate principal amount of additional tranches	$ 200,000
One-time first amendment fee	$ 1,100
Number of existing tranches | tranche	3
Annual interest rate	8.30%
Percentage of principal amount for final payment	9.00%
Subsequent Event | Amended 2020 Oxford Term Loan | Secured Debt | Minimum
Subsequent Event [Line Items]
Prepayment fee	1.00%
Subsequent Event | Amended 2020 Oxford Term Loan | Secured Debt | Maximum
Subsequent Event [Line Items]
Prepayment fee	3.00%
Subsequent Event | Amended 2020 Oxford Term Loan | Secured Debt | LIBOR
Subsequent Event [Line Items]
Basis spread on variable rate	8.19%
Subsequent Event | Amended 2020 Oxford Term Loan Tranche One | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt	$ 110,000
Term loan	40,000
Subsequent Event | Amended 2020 Oxford Term Loan Tranche Two | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt	30,000
Subsequent Event | Amended 2020 Oxford Term Loan Tranche Three | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt	30,000
Subsequent Event | Amended 2020 Oxford Term Loan Tranche Four | Secured Debt
Subsequent Event [Line Items]
Proceeds from the issuance of debt	$ 30,000
Subsequent Event | Stock Option
Subsequent Event [Line Items]
Stock options granted (in shares) | shares			800,000
Award granted, weighted average exercise price (in dollars per share) | $ / shares			$ 33.84
Vesting period			4 years
Contractual term			10 years
Subsequent Event | Stock Option | Cliff Vesting
Subsequent Event [Line Items]
Vesting period			1 year